Lamda Computer Products competed for and won a contract to produce tow prototype

Question

Lamda Computer Products competed for and won a contract to produce tow prototype units of a new type of computer that is based on laser optics rater than on electronic binary bits. The first unit produced by Lamda took 5,000 hours to produce and required $250,000 worth of material, equipment usage and supplies. The second unit took 3,500 hours and used $200,000 worth of materials, equipment usage and supplies. Labor is $30 per hour.

a. Lamda was asked to present a bid for 10 additional units as soon as the second unit was completed. Production would start

immediately. What would this bid be?

b. Supposed there was a significant delag between the contracts. During this time, personnel and equipment were reassigned to

other projects. Explain how this affect the subsequent bid?

Explanation / Answer

time for a single piece = 3500 hrs

time for 10 peices= 35000 hrs

cost of labor = 35000x30= 1,050,000 $

cost of materials= 200,000x10= 2,000,000$

so she sshould bid more than 3,050,000$

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