Reference no: EM132363917

You are a custom car manufacturing and receive an order to produce 10 custom cars. You have estimated AUD 500,000 to obtain the required spare parts and materials for building the 10 cars. You have also estimated that the design and production of the first car will require 10,000 labour hours and an 60% improvement curve is expected. Skilled labour cost per hour is at AUD 60. You desired a profit of 10%.

The learning curve unit value for 10 units at 60% improvement rate is 0.1832 while the cumulative learning curves for 10 units at 60% improvement rate is 3.813.

Using the above information, answer the following questions:

a. How many labour hours should the tenth unit require?

b. what price would you ask for the project?