Learning curve theory in practice

Assignment Help Cost Accounting
Reference no: EM13558104

Dench manufacturing has received a special order from Sands to produce 225 components to be incorporated into Sand's product. The components have a high cost, due to the expertise required for their manufacture. Dench produces the components in batches of 15, and as the ones required are to be custom-made to Sands' specifications, a 'prototype' batch was manufactured with the following costs:

Additional information with respect to the workforce is noted below:

Skilled Virtually a permanent workforce that has been employed by Dench for a long period of time. These workers have a great deal of experience in manufacturing components similar to those required by Sands, and turnover is virtually non-existent.

Semi-Skilled Hired by Dench on an 'as needed' basis. These workers would have had some prior experience, but Dench management believe the level to be relatively insignificant. Past experience shows turnover rate to be quite high, even for short employment periods.

Dench's plans are to exclude the prototype batch from Sands' order. Management believes a 80% learning rate effect is experienced in this manufacturing process, and would like a cost estimate for the 225 components prepared on that basis.

Required

a) Prepare the cost estimate, assuming an 80% learning rate is experienced.

b) Briefly discuss some of the factors that can limit the use of learning curve theory in practice.

Reference no: EM13558104

Direct materials and conversion between february and march

Prepare a cost of production report, and identify the missing amounts for Work in Process-Roasting Department and determine the increase or decrease in the cost per equivalent

Define cost assigned to the units in the ending work

In the month of September, a department had 500 units in the beginning work in process inventory that were 60% complete. These units had $30,000 of materials costs and $22,5

How ethics can best be incorporated in organisations

Critique the Ethics of those involved in the News of the World phone hacking scandal. Demonstrate in your critical analysis how the use of Ethics by the parties involved cou

Calculate the cash flows for the new crystal jewelry project

Determine the new target weighted average cost of capital for Felicia & Fred, given following assumptions - Calculate the cash flows for the new crystal jewelry project.

Evaluate the opportunity cost of the president''s decision

Drop a Product and opportunity cost Midwestern Sod Company produces two products - Evaluate the opportunity cost of the president's decision to stick with both types of grass?

How many minutes of mixing machine time would be required

How many minutes of mixing machine time would be required to satisfy demand for all four products and how much of each product should be produced to maximize net operating inc

How much cost would be allocated in first-stage allocation

Bullets Corporation uses an activity-based costing system with three activity cost pools. The company has provided the following data concerning its costs: How much cost, in

Why might noncancellability override the executor nature

Is the executory nature of lease contracts important in assessing lease accounting? How have leases been interpreted? Why might noncancellability override the executor natur

Reviews

Write a Review

 
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd