Compute the labor time required to produce 8 and 16 units. b. Assume that labor time costs $125 per hour. Compare the cost of producing the 1st unit to the cost of producing the 16th unit. What is the percentage of the cost of the 16th unit to the cost of the 1st unit?
Assume that General Dynamics, which manufactures high-technology instruments for spacecraft, is considering the sale of a navigational unit to a government agency in India that wishes to launch its own communications satellite. The government agency plans to purchase 8 units, although it would also consider buying 16 units. General Dynamics has started a chart relating labor time required to units produced.
| Unit Produced (X) | Time Required to Produce the Xth Unit |
| 1 | 10,000 hours |
| 2 | 8,000 hours |
| 4 | 6,400 hours |
| 8 | ? |
| 16 | ? |
Required:
a. Compute the labor time required to produce 8 and 16 units.
b. Assume that labor time costs $125 per hour. Compare the cost of producing the 1st unit to the cost of producing the 16th unit. What is the percentage of the cost of the 16th unit to the cost of the 1st unit?
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