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Your company has received an order for 20 units of a product. The labor cost to produce the item is $9.76 per hour. The setup cost for the item is $64 and material costs are $27 per unit. The item is sold for $100. The learning rate is 75 percent. Overhead is assessed at a rate of 47 percent of unit labor cost.
1) Determine the average unit cost for the 20 units if the first unit takes 4.9 hours. (Answered)
2) Determine the minimum number of units that need to be made before the selling price meets or exceeds the average unit cost. ? units
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