ACCA PM · Chapter 11 · Question 1 of 10
The first unit of a new product took 100 hours to make. An 80% learning curve applies. What is the cumulative average time per unit when 8 units have been produced?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) 51.2 hours
Explanation
Each time cumulative output doubles, the cumulative average time falls to 80% of its previous value. 1 unit: 100 hours; 2 units: 80; 4 units: 64; 8 units: 51.2 hours. Total time for 8 units = 8 x 51.2 = 409.6 hours.
More Quantitative analysis in budgeting MCQs
- Q3The first batch of a new product took 200 hours. The first four batches took a total of 512 hours. What learning rate is being experienced?
- Q4In which of the following situations is a learning curve most likely to apply?
- Q5Total production costs were $74,000 at an activity level of 12,000 units and $102,000 at 20,000 units. Using the high-low method, what is…
- Q6Total costs were $61,000 at 10,000 units and $93,000 at 18,000 units. Fixed costs increase by $8,000 when activity exceeds 15,000 units…
- Q7A company uses linear regression (y = a + bx) to estimate overhead costs (y, $000) from machine hours (x, 000 hours). From five…