Check my work Problem 6-7 Johnson Industries received a contract to develop and

Question

Check my work Problem 6-7 Johnson Industries received a contract to develop and produce four high-intensity long-distance recelver/transmitters for cellular telephones. The first took 2,000 labor hours and $39,000 worth of purchased and manufactured parts; the second took 1,520 labor hours and $33,540 in parts; the third took 1,320 labor hours and $30,860 in parts; and the fourth took 1125 labor hours and $28170 in parts Johnson was asked to bid on a follow-on contract for another dozen receivertransmitter units. (Hint: There are two learning curves-one for labor and one for parts.) Use Exhibit 6.5 a. How many labor hours should Johnson estimate are needed for the additional 12 units? (Round your answer to the nearest whole number.) hours b. How much should Johnson estimate the parts cóst will be for the additional 12 units? (Round your answer to the amount.)

Explanation / Answer

For Labour Hours

1st Unit require 2000 Hr while 2nd require 1520 Hr.

Learning from unit 1 to 2 = 1520/2000 = 76%

2nd Unit require 1520 Hr while 4rth require 1125 Hr.

Learning from unit 2 to 4 = 1125/1520 = 74%

Average learning = (76% + 74%) / 2 = 75%

Using exhibit , for 16th unit = 7.635

for 4rth unit = 2.946

For 16 unit , T16 = 7.635*2000 = 15270

For 4 unit , T4= 2.946*2000=5892

So T12 = 15270-5892 = 9378 Hrs

b) Cost

1st Unit require $39000 while 2nd require $33540

Learning from unit 1 to 2 = 39000/33540 = 86%

2nd Unit require $33540 while 4rth require 28170

Learning from unit 2 to 4 = 33540/28170 = 84%

Average learning = (86% + 84%) / 2 = 85%

Using exhibit , for 16th unit = 10.38

for 4rth unit = 3.345

For 16 unit , T16 = 10.38*39000 = $404820

For 4 unit , T4= 3.345*39000= $130455

So T12 = $404820-$130455 = $274365

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