Oman Transformers & Switchgear LLC (OT) is the pioneer manufacturers of transformers in Oman. The company manufactures transformers in a batch of twenty-five units. The company hired the specialists who will be engaged only on manufacturing transformers and were paid at RO 40 per hour. The company has orders to produce 400 transformers in the next six months. The company believes that as the workers are doing the same task repeatedly, there will a learning curve effect. So, the Management Accountant of the company was asked to measure the learning curve rate so that the company can estimate the labour cost of manufacturing transformers with more accuracy. The Management Accountant requested you to help in estimates the learning curve rate. You have advised the Management accountant to record the time taken to produce first and second batch of transformers to identify the presence of learning effect. After completion of the production of the first two batches, the management accountant again approached you and informed that the time taken to produce first and second batches of transformers is 250 hours and 237.5 hours respectively.

You are required to help the Management Accountant of Oman Transformers & Switchgear LLC in :

a) Measuring the learning curve rate applicable for the company. (2 Marks)

b) Estimatingtheincrementallabourcostofproducingfirst201to400transformers (2 Marks)

c) Estimating the total time required to produce first 400 transformers (2 Marks)

d) Estimating the average labour cost to produce first 400 transformers (2 Marks)

e) Estimating the average labour cost when the company produces first 100

transformers (2 Marks)