How many units of the follow-on contract must be produced

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Referring to question 18-6, how many units of the follow-on contract must be produced before a profit is realized?

Question 18-6

A company has decided to bid on a follow-on contract for 500 units of a product. The company has already produced 2,000 units on a 75 percent learning curve. The 2000th unit requires 80 hours of production time. If a fully burdened hour is $80 and the company wishes to generate a 12 percent profit, how much should be bid?

Reference no: EM131246360

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