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What will be the total expected unit cost for four aircrafts

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Reference no: EM132533416

Eagle Airplane Company has built a new model jet aircraft, which it intends to sell to high net worth clients. This aircraft required 20,000 hours to complete. Eagle believes a cumulative average learning model best reflects the company's production efficiency.

Eagle's manufacturing costs for the second aircraft are presented below.

Direct labor                     $ 140 per direct labor hour

Variable overhead            120 per direct labor hour

Fixed overhead              200000 per unit

Materials                         90000 per unit

Eagle just received a contract to make three more identical aircraft (a total of four were made). The total labor cost for the second unit was $2,240,000.

Question 1: What will be the total expected unit cost for four aircrafts? (Please round to the closest number)

Option A. $4,502,000

Option B. $3,328,000

Option C. $4,212,000

Option D. $3,618,000

Reference no: EM132533416

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