Question
The Helicopter Division of GLD, Inc., is examining helicopter assembly costs at its Indiana plant. It initial order for eight of its new land-surveying
The Helicopter Division of GLD, Inc., is examining helicopter assembly costs at its Indiana plant. It initial order for eight of its new land-surveying helicopters. GLD can adopt one of two methods of assembling the helicopters: Labor-intensive Assembly method Machine-intensive Assembly method Direct material cost per $40,000 $38,000 helicopter Direct assembly labor 2,000 time for first helicopter labor hours 900 labor hours: Learning curve for cumulative Incremental assembly labor time 85% 90% per helicopter average-time unit-time Direct assembly labor. $30 per hour $30 per hour cost per direct- Equipment-related per direct- indirect MFG cost $12 assembly $54 assembly labor hour labor hour Material handling related indirect MFG of direct of direct 50% 50% material cost material cost cost The index for 85% learning curve percent (b) = In 0.85/In 2 =-0.234465 The index for 90% learning curve percent (b) In 0.90/In 2 =-0.152004 How many direct-assembly labor-hours are required to assemble the first four helicopters under the labor- intensive method? OA. 5,280 hours OB.5,780 hours OC4,200 hours OD 4,125 hours
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