The SVP Boat Company, which is under contract to the U.S. Navy, assembles troop deployment boats. (Click the icon to view the additional information.) SVP Boat reports the following cost information for the first PT109 assembled. (Click the icon to view the cost information.) More info Data table Recu Begi Nul 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 SVP Boat submit a proposal on the cost of producing another six PT109. SVP Boat reports the following cost information for the first PT109 assembled Direct materials cost $ 203,000 per PT109 Direct manufacturing labor time for first boat 15,100 direct manufacturing labor-hours Learning curve for manufacturing labor time per boat 90% cumulative average time Direct manufacturing labor costs S 43 per direct manufacturing labor-hour Variable manufacturing overhead costs S 28 per direct manufacturing labor-hour Other manufacturing overhead 15% of direct manufacturing labor costs Tooling costs $ 283,000 1 In 0.90 - 0.105361 Using the formula for a 90% leaming curve, b = = = -0.152004 In 2 0.693147 2 Tooling can be reused at no extra cost because all of its cost has been assigned the first deployment boat. ( Print Done 1 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 Xth unit: Labor-hours Labor-hours 15,400 15,400 13,860 29,260 3 13,032 42,292 12,474 54,766 12,058 66,824 11,728 78,552 90,009 2 4 5 6 7 11,457 (Enter the hours rounded to the nearest hour.) The total time to produce six PT109s is 74,609 hours Now calculate the predicted total costs of producing the six PT1095. (Round your answers to the nearest whole dollar.) Direct materials cost $ 1,176,000 Direct manufacturing labor 2,909,751 Variable manufacturing overhead 2,163,661 Other manufacturing overhead 727,438 6,976,850 Total costs S Requirement 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 S6,213,967. Why are the predictions different? How should Eastern Shore decide which model it should use? (Click the icon view the cumulative average-time learning model's cumulative average time per unit and cumulative total time.) Difference in total costs to manufacture the second through seventh boat under the incremental unit-time learning model and the cumulative average-time learning model is $762,883 The total costs are higher for the incremental unit-time learning model. as the number of Direct manufacturing labor-hours required to make additional units decline more slowly in the incremental unit-time learning curve relative to the cumulative average-time learning curve when the same 90% factor is used for both curves. The reason that in the incremental unit-time learning curve, units double only the last unit produced has a cost of 90% of the initial cost. In the cumulative average-time learning model, doubling the number of units causes the average cost of all the units produced (not just the last unit) to be 90% of the initial cost The SVP Boat Company, which is under contract to the U.S. Navy, assembles troop deployment boats. (Click the icon to view the additional information.) SVP Boat reports the following cost information for the first PT109 assembled. (Click the icon to view the cost information.) More info Data table Recu Begi Nul 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 SVP Boat submit a proposal on the cost of producing another six PT109. SVP Boat reports the following cost information for the first PT109 assembled Direct materials cost $ 203,000 per PT109 Direct manufacturing labor time for first boat 15,100 direct manufacturing labor-hours Learning curve for manufacturing labor time per boat 90% cumulative average time Direct manufacturing labor costs S 43 per direct manufacturing labor-hour Variable manufacturing overhead costs S 28 per direct manufacturing labor-hour Other manufacturing overhead 15% of direct manufacturing labor costs Tooling costs $ 283,000 1 In 0.90 - 0.105361 Using the formula for a 90% leaming curve, b = = = -0.152004 In 2 0.693147 2 Tooling can be reused at no extra cost because all of its cost has been assigned the first deployment boat. ( Print Done 1 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 Xth unit: Labor-hours Labor-hours 15,400 15,400 13,860 29,260 3 13,032 42,292 12,474 54,766 12,058 66,824 11,728 78,552 90,009 2 4 5 6 7 11,457 (Enter the hours rounded to the nearest hour.) The total time to produce six PT109s is 74,609 hours Now calculate the predicted total costs of producing the six PT1095. (Round your answers to the nearest whole dollar.) Direct materials cost $ 1,176,000 Direct manufacturing labor 2,909,751 Variable manufacturing overhead 2,163,661 Other manufacturing overhead 727,438 6,976,850 Total costs S Requirement 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 S6,213,967. Why are the predictions different? How should Eastern Shore decide which model it should use? (Click the icon view the cumulative average-time learning model's cumulative average time per unit and cumulative total time.) Difference in total costs to manufacture the second through seventh boat under the incremental unit-time learning model and the cumulative average-time learning model is $762,883 The total costs are higher for the incremental unit-time learning model. as the number of Direct manufacturing labor-hours required to make additional units decline more slowly in the incremental unit-time learning curve relative to the cumulative average-time learning curve when the same 90% factor is used for both curves. The reason that in the incremental unit-time learning curve, units double only the last unit produced has a cost of 90% of the initial cost. In the cumulative average-time learning model, doubling the number of units causes the average cost of all the units produced (not just the last unit) to be 90% of the initial cost