Randy has been asked to develope an estimate of the perunit selling price (the p

Question

Randy has been asked to develope an estimate of the perunit selling price (the price that each unit will be sold for) on a new line of hand crafted booklets that offer excuses formissed appointments. cost of directlabor               $20/hour cost of thematerial               $43.75/batch of 25 booklets cost ofoverhead                   50% of direct labor cost desiredprofit                        20% of total manufacturing cost a.)use a 75% learning curve for estimating the cost of directlabor b.)the time to complete the first booklet is estimated at 0.60hour and c.)the estimated time to complete the 25th booklet should beused as the standard time for the purpose of determining theunit selling price. what would randy's estimate be for the unit sellinprice? Randy has been asked to develope an estimate of the perunit selling price (the price that each unit will be sold for) on a new line of hand crafted booklets that offer excuses formissed appointments. cost of directlabor               $20/hour cost of thematerial               $43.75/batch of 25 booklets cost ofoverhead                   50% of direct labor cost desiredprofit                        20% of total manufacturing cost a.)use a 75% learning curve for estimating the cost of directlabor b.)the time to complete the first booklet is estimated at 0.60hour and c.)the estimated time to complete the 25th booklet should beused as the standard time for the purpose of determining theunit selling price. what would randy's estimate be for the unit sellinprice? what would randy's estimate be for the unit sellinprice?

Explanation / Answer

0.6 hours

0.093hours

0.093 * 25 * 20

Time to complete thefirst book

0.6 hours

Time to comlete the 25th book using75% Learning Curve

0.093hours

Cost of direct labour

0.093 * 25 * 20

46.5 Cost of Material 43.75 Cost of overhead 23.25 Manufacturing Cost 113.5 Desired Profit 22.7 Selling Price of batch of 25books 136.2 Unit Selling price ( 136.2 /25 ) 5.448

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