Required: What is the selling price of the 8th unit?
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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3

Transcribed Image Text:Question 4
Tempo, a car manufacturer company has developed several
new products and one of them is a new type of luxury car seat.
The estimated labour time for the first unit is 12 hours but a
learning curve of 90 % is expected to apply for the first eight
units produced. The cost of labour is shs.20 per hour. The cost
of materials and other variable overheads is expected to total
Shs. 320 per unit. Tembo Co plans on pricing the seat by
adding a 40% mark-up to the total variable cost per seat, with
the labour cost being based on the incremental time taken to
produce the 8th unit.
Required:
What is the selling price of the 8th unit?
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