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A machine shop has received an order to manufacture 10 large drum rollers. After examining the design of the rollers, the production engineer expects 55 labor-hours to be required for the first drum roller and a learning rate of 75 percent. The shop’s standard charge (including overhead and profit) for this type of job in $60 per labor-hours required.
a. How many total labor-hours should this job require?
b. How much should the machine shop charge the customer for this order?
c. The customer has just called and would like to know how much it would be charged for an additional 5 drum rollers. How many additional labor-hours should this require? What should be the additional charge to the customer?
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