TN Furniture TN Furniture has developed a new type of luxury car seat. The estimated labour time for the first unit is 12 hours, but a learning curve of 75% is expected to apply for the first 8 units produced. The cost of labour is R15 per hour. The cost of materials and other variable overheads is expected to total R230 per unit. TN Furniture plans on pricing the seat by adding a 50% 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. Calculate the price that TN Furniture expects to charge for the new seat. ( Round your b (the learning coefficients) to the nearest three decimal places and all other values to two decimal places.) The first phase of production has now been completed for the new car seat. The first unit actually took 12.5 hours to make and the total time for the first eight units was 34.3 hours, at which point the learning effect came to an end. TN Furniture are planning on adjusting the price to reflect the actual time it took to complete the 8th unit. a. Calculate the actual rate of learning and state whether this means that the labour force actually learnt more or less quickly than expected. b. Briefly explain whether the adjusted price charged by TN Furniture will be higher or lower than the price you calculated in part (4.1) above.
TN Furniture
TN Furniture has developed a new type of luxury car seat. The estimated labour time for the first unit is 12 hours, but a learning curve of 75% is expected to apply for the first 8 units produced. The cost of labour is R15 per hour. The cost of materials and other variable overheads is expected to total R230 per unit.
TN Furniture plans on pricing the seat by adding a 50% 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.
Calculate the price that TN Furniture expects to charge for the new seat. ( Round your b (the learning coefficients) to the nearest three decimal places and all other values to two decimal places.)
The first phase of production has now been completed for the new car seat. The first unit actually took 12.5 hours to make and the total time for the first eight units was 34.3 hours, at which point the learning effect came to an end. TN Furniture are planning on adjusting the price to reflect the actual time it took to complete the 8th unit.
a. Calculate the actual rate of learning and state whether this means that the labour force actually learnt more or less quickly than expected.
b. Briefly explain whether the adjusted price charged by TN Furniture will be higher or lower than the price you calculated in part (4.1) above.
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