US CMA Part 1 · Chapter 2 · Question 8 of 30
The first unit of a new specialized machine took 500 direct labor hours to assemble. Production follows an 80% cumulative average-time learning curve. How many hours in total should units 5 to 8 require?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) 768 hours
Explanation
With a cumulative average-time model, the average time falls to 80% each time cumulative output doubles. Average for 4 units = 500 x 0.8^2 = 320 hours, total 1,280. Average for 8 units = 500 x 0.8^3 = 256 hours, total 2,048. Units 5-8 = 2,048 - 1,280 = 768 hours.
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