management Accounting

Question 2 a) Pty is in the process of developing several new products. One of them is innovative gymnastic equipment. The estimated labour time for the first unit is 12 hours but a learning curve of 80% is expected to apply for the first ten units produced. The cost of labour is M10.50 per hour. The cost of materials and other variable overheads is expected to total M160.25 per unit. Phakoe Pty plans on pricing the gymnastic equipment by adding a 20% mark-up to the total variable cost per gymnastic equipment, with the labour cost being based on the incremental time taken to produce the 8th unit Required. Determine labour cost and the total price of the 10th unit and state One serious flaw of the learning curve concept