Question 4 (30 pts): REAL-WORLD FOCUS Applications of Learning Curves Learning curve analysis is commonly used to improve cost estimates in situations when learning is likely to occur. SURVEY OF THE USE OF LEARNING CURVES A survey of 787 management accountants and members of the Chartered Institute of Management Accountants (UK) employed in more than 20 different industries has shown that learning curves are applied most often in manufacturing firms. Also, these firms tend to use learning curves in planning and budgeting, topics we cover in Chapters 9. 10. 11. and 12. Source: Grahame Steven. "The Learning Curve: The Key to Future Management?" The Chartered Institute of Management Accountants, Research Executive Summary Series 6, nn 12 (2010) LEARNING HELPS INCREASE OUTPUT Airplanes are complex products, and it takes time to smooth out the production process. European-based Airbus Group seems to be making progress. In December 2015, the company produced 79 aircraft, which was an improvement over the 75 produced the prior December. Production for the entire 2015 year was above the 2014 level and marked the 13th year in a row of higher output. Part of this continuous increase in production is getting through the learning curve associated with the introduction of a new model of plane. Source: Robert Wall, Airbus Tackles Its Procrastination Woes-Plane Maker Looks for Ways to Avoid the December Rush to Meet Jet-Delivery Targets." The Wall Street Journal Europe ed., May 25, 2016, p. 81 Figure 1 Learning Curves Please read the real-life application of learning curves shown in Figure-1. Answer the following questions: a. Explain the use of learning curves in cost estimation. b. Do some research and find a real-life example in which learning curves were used for cost estimation.