The Pacific Boat Company, which is under contract to the U.S. Navy, assembles troop deployment boats. (Click the icon to view the additional information.) Pacific Boat reports the following cost information for the first PT109 assembled. E (Click the icon to view the cost information.) Read the requirements. Requirement 1. Prepare a prediction of the total costs for producing the six PT109s for the Navy. Begin by calculating the cumulative total time in labor-hours. (Round the individual unit time for Xth unit to the nearest whole number) Number of individual unit time for Cumulative total time: units Requirements - Xth unit: Labor-hours Labor-hours 1 2 3 1. Prepare a prediction of the total costs for producing the six PT109s for the Navy. 2. Compare the cost predictions from requirement 1 (incremental unit-time learning model) with the cost predictions based on a cumulative average-time learning model which has total costs of $5,854,225. Why are the predictions different? How should Pacific Boat decide which model it should use? 4 5 6 7 Cumulative average-time learning model's cumulative average time per unit and cumulative total time: Number of Cumulative average time Cumulative total time: units per unit: Labor-hours Labor-hours 1 15,400 15,400 2 13,860 27,720 - X More info 3 13,032 39,096 4 12,474 49.896 As part of its research program, it completes the assembly of the first of a new model (PT109) of deployment boats. The Navy is impressed with the PT109. It requests that Pacific Boat submit a proposal on the cost of producing another six PT109s. Pacific Boat reports the following cost information for the first PT109 assembled. 5 12,058 60.290 70.368 6 6 11,728 11,457 7 80,199 The Pacific Boat Company, which is under contract to the U.S. Navy, assembles troop deployment boats. (Click the icon to view the additional information.) Pacific Boat reports the following cost information for the first PT109 assembled. (Click the icon to view the cost information.) Read the requirements. FREE Requirement 1. Prepare a prediction of the total costs for producing the six PT109s for the Navy. Begin by calculating the cumulative total time in labor-hours. (Round the individual unit time for Xth unit to the nearest whole number.) Number of Individual unit time for Cumulative total time: X units Xth unit: Labor-hours Labor-hours Data table 1 2 3 4 5 6 7 Direct materials cost $ 203,000 per PT109 Direct manufacturing labor time for first boat 15,400 direct manufacturing labor-hours Learning curve for manufacturing labor time per boat 90% cumulative average time Direct manufacturing labor costs $ 37 per direct manufacturing labor-hour Variable manufacturing overhead costs $ 29 per direct manufacturing labor-hour Other manufacturing overhead 15% of direct manufacturing labor costs Tooling costs $ 283,000 In 0.90 - 0.105361 Using the formula for a 90% learning curve, b = In 2 2 Tooling can be reused at no extra cost because all of its cost has been assigned to the first deployment boat. 0.693147 = -0.152004
