TASK EIGHT: Learning Curves $10$ points

Delaware Canoe Corporation just began manufacturing a new type of canoe. In January, the company made the first $5$ units of this new product. The total direct labor hours need to produce these $5$ units was $5,000,$ or an average of $1,000$ per unit. These $5$ units will makeup the baseline for your learning curve computations. In other words, the class example the in$-$class homework problem both had a baseline of one $1$ unit, but that is not the case here. You should start with the baseline of $5$ units and the average of $1,000$ hours per unit and work forward from there. Each of the $5$ units produced in January required $15$ pounds of direct materials which cost $$40$ per pound. Direct labor costs $$20$ per hour. Variable overhead is $125\%$ of direct labor cost. The company produced $15$ units of the new product in February and $20$ units in March. Labor is expected to follow a $95\%$ learning curve over the three months. Compute the predicted total variable product costs for March $($Direct Materials, Direct Labor, plus Variable Overhead$).$