Thunder Co has developed a new model of motorcycle. The estimated labour time for assembly the first unit is 120 hours, but a learning curve of 75% is expected to apply for the first 32 units produced.

The cost of labour is $30 per hour.

In period 1, budget production is 20 units.

In period 2, budgeted production is 30 units.

USE THE ABOVE DATA TO ANSWER ALL Section B-3 QUESTIONS.

• Calculate the budgeted labour cost for period 1.(round to 2 decimal places)
• What is the labour cost of the 32th unit?(round to 2 decimal places)
• What is the labour cost of the first 50 units?(round to 2 decimal places)

The first phase of production has now been completed for the new motorcycle. The first unit actually took 138 hours to make and the total time for the first 32 units was 1.440 hours, at which point the learning effect came to an end.

• What was the actual rate of learning which occured?(in % round to ZERO decimal place)

Another product which Thunder Co has in development is a new sccoter. Based on previous experience of producing similar products, Thunder Co had assumed that a learning rate of 80% would apply to the manufacture of this new product but after the first phase of production had been completed, management realised that a learning rate of 70% had been achieved.

Which of the following statements could explain why the actual rate of learning differed from the rate which was expected?

There were minimal stoppages in the production process

There were machine breakdowns during production

Staffing levels were stable during the first manufacturing phase

There was high staff turnover during this period

The design of the chair was changed several times at this early phase

Assembly of the new scooter was manual and very repetitive