alculate the total variable cost of producing 300 units taking into consideration the learning curve effect.
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Zarget Ltd produce hand held medical equipment and are developing a new product to bring to the market. The prototype took 5 labour hours to produce at a cost of £15 per labour hour. Other variable costs amount to £45 per unit. It is estimated that an 80% learning curve will apply and that steady state will be reached after 100 units have been produced. They expect to be able to produce and sell 300 units in the next 12 months. (b=-0.3219)
Required: Calculate the total variable cost of producing 300 units taking into consideration the learning curve effect.
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