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Renewal Technologies Inc (RTI) produces digesters and the necessary connections for electrical generation using the methanol generated by the Digesters. RTI engineers and designers

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Renewal Technologies Inc (RTI) produces digesters and the necessary connections for electrical generation using the methanol generated by the Digesters. RTI engineers and designers have created a prototype semi-submerged tank with an attachment system. The information for the Digester System is shown below. Direct material cost per unit Direct labour time for the assembly of the first unit in hours Direct labour cost per hour Leaming effect for design hours per unit Variable manufacturing overhead Fixed overhead cost per (A 90% learning curve implies that b= = -0.1520) $75,000 220 $ 110 90% 70% of direct labor cost $5,000 The first unit is kept on display. A finished System carries a 25 % markup on variable costs. The learning effect is believed to be valid only for the first 20 units. All units after that take the same time per unit as the 20th unit. Required Determine the total cost to the BAMC for an initial order of 30 Systems as part of a pilot project.

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