United Research Associates (URA) had received a contract to produce two units of a new cruise missile guidance control. The first unit took 4,000 hours to complete and cost $30,000 in materials and equipment usage. The second took 3,200 hours and cost $21,000 in materials and equipment usage. Labor cost is charged at $18 per hour. The prime contractor has now approached URA and asked to submit a bid for the cost of producing another 20 guidance controls. Use Exhibit 6.4 and Exhibit 6.5. a. What will the last unit cost to build? (Round your answer to the nearest dollar amount.) Cost of last unit b. What will be the average time for the 20 missile guidance controls? (Round your answer to the nearest whole number.) Average time hours c. What will the average cost be for guidance control for the 20 in the contract? (Round your answer to the nearest dollar amount.) Average cost

Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
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Ch.6 Q10
Exhibit 6.4
Unit
1
2
3
14
5
6
7
8
9
10
12
14
16
18
20
22
24
25
30
35
40
45
50
60
70
80
90
100
120
140
160
180
200
250
300
350
400
450
500
600
700
800
900
1,000
1,200
1,400
1,600
1,800
2,000
2,500
3,000
60%
1.0000
6000
4450
3600
3054
2670
2383
2160
1980
1832
1602
1430
1290
1188
1099
1025
0961
0933
0815
0728
0660
0605
0560
0489
0437
0396
0363
0336
0294
0262
0237
0218
0201
0171
0149
0133
0121
0111
0103
0090
0080
.0073
0067
0062
0054
0048
0044
0040
0037
0031
0027
Improvement Curves: Table of Unit Values
65%
1.0000
6500 7000
5052
4225
3678
3284
2984
2746
2552
2391
2135
1940
1785
1659
1554
1465
1387
1353
1208
1097
1010
0939
Unit Improvement Factor
70%
75%
1.0000 1.0000
7500
6338
5625
5127
4754
4459
4219
4017
3846
0171
0157
0146
0137
0122
0111
0102
0095
0089
0077
0069
5682
4900
4368
3977
3674
3430
3228
3058
2784
2572
2401
2260
2141
2038
1949
1908
1737
1605
1498
1410
0879
0785
0713
1123
0657
1049
0610 0987
0572
0935
0510
0851
0464
0786
0427
0734
0397
0691
0371
0655
0323
0289
0262
0241
0224
0210
0188
1336
1216
0584
0531
0491
0458
0431
0408
0372
0344
0321
0302
0286
0260
0240
0225
0211
0200
0178
0162
3565
3344
3164
3013
2884
2772
2674
2629
2437
2286
2163
2060
1972
1828
17 15
1622
1545
1479
1371
1287
1217
1159
1109
1011
80%
0495
0468
0446
0427
0389
0360
1.0000
8000
7021
6400
5956
5617
5345
5120
4930
4765
4493
4276
4096
3944
3812
3697
3595
3548
3346
3184
3050
2936
2838
2676
2547
2440
2349
.2271
2141
2038
1952
1879
1816
1691
0937
1594
0879
1517
0832
1453
0792
1399
0758
1352
0703
1275
0659
1214
0624
1163
0594 1119
0569 -1082
0527
1020
0971
0930
0895
0866
0806
0760
85%
1.0000
8500
7729
7225
6857
6570
6337
6141
5974
5828
5584
5386
5220
5078
4954
4844
4747
4701
4505
4345
4211
4096
90%
1.0000
9000
8462
8100
O
7830
7616
7439
7290
7161
7047
6854
6696
6561
6445
6342
6251
6169
6131
5963
5825
5708
5607
5518
5367
.3996
3829
3693
5243
3579
5137
3482
5046
3397
4966
3255
4830
3139
4718
3042 4623
2959
4541
2887
4469
2740
4320
2625
4202
2532
4105
2454
4022
2387
3951
2329
3888
2232
3782
2152
3694
2086
3620
2029 3556
1980
3499
1897
3404
1830
3325
1773
3258
1725 3200
1683
3149
1597
3044
1530
2961
95%
1.0000
9500
9219
.9025
8877
8758
8659
8574
8499
8433
8320
8226
8145
8074
8012
7955
7904
7880
7775
7687
7611
7545
7486
7386
7302
7231
7168
7112
7017
.6937
.6869
6809
.6757
6646
.6557
.6482
6419
6363
6314
.6229
6158
.6098
6045
5998
5918
5850
5793
5743
5698
5605
55.30
Transcribed Image Text:Exhibit 6.4 Unit 1 2 3 14 5 6 7 8 9 10 12 14 16 18 20 22 24 25 30 35 40 45 50 60 70 80 90 100 120 140 160 180 200 250 300 350 400 450 500 600 700 800 900 1,000 1,200 1,400 1,600 1,800 2,000 2,500 3,000 60% 1.0000 6000 4450 3600 3054 2670 2383 2160 1980 1832 1602 1430 1290 1188 1099 1025 0961 0933 0815 0728 0660 0605 0560 0489 0437 0396 0363 0336 0294 0262 0237 0218 0201 0171 0149 0133 0121 0111 0103 0090 0080 .0073 0067 0062 0054 0048 0044 0040 0037 0031 0027 Improvement Curves: Table of Unit Values 65% 1.0000 6500 7000 5052 4225 3678 3284 2984 2746 2552 2391 2135 1940 1785 1659 1554 1465 1387 1353 1208 1097 1010 0939 Unit Improvement Factor 70% 75% 1.0000 1.0000 7500 6338 5625 5127 4754 4459 4219 4017 3846 0171 0157 0146 0137 0122 0111 0102 0095 0089 0077 0069 5682 4900 4368 3977 3674 3430 3228 3058 2784 2572 2401 2260 2141 2038 1949 1908 1737 1605 1498 1410 0879 0785 0713 1123 0657 1049 0610 0987 0572 0935 0510 0851 0464 0786 0427 0734 0397 0691 0371 0655 0323 0289 0262 0241 0224 0210 0188 1336 1216 0584 0531 0491 0458 0431 0408 0372 0344 0321 0302 0286 0260 0240 0225 0211 0200 0178 0162 3565 3344 3164 3013 2884 2772 2674 2629 2437 2286 2163 2060 1972 1828 17 15 1622 1545 1479 1371 1287 1217 1159 1109 1011 80% 0495 0468 0446 0427 0389 0360 1.0000 8000 7021 6400 5956 5617 5345 5120 4930 4765 4493 4276 4096 3944 3812 3697 3595 3548 3346 3184 3050 2936 2838 2676 2547 2440 2349 .2271 2141 2038 1952 1879 1816 1691 0937 1594 0879 1517 0832 1453 0792 1399 0758 1352 0703 1275 0659 1214 0624 1163 0594 1119 0569 -1082 0527 1020 0971 0930 0895 0866 0806 0760 85% 1.0000 8500 7729 7225 6857 6570 6337 6141 5974 5828 5584 5386 5220 5078 4954 4844 4747 4701 4505 4345 4211 4096 90% 1.0000 9000 8462 8100 O 7830 7616 7439 7290 7161 7047 6854 6696 6561 6445 6342 6251 6169 6131 5963 5825 5708 5607 5518 5367 .3996 3829 3693 5243 3579 5137 3482 5046 3397 4966 3255 4830 3139 4718 3042 4623 2959 4541 2887 4469 2740 4320 2625 4202 2532 4105 2454 4022 2387 3951 2329 3888 2232 3782 2152 3694 2086 3620 2029 3556 1980 3499 1897 3404 1830 3325 1773 3258 1725 3200 1683 3149 1597 3044 1530 2961 95% 1.0000 9500 9219 .9025 8877 8758 8659 8574 8499 8433 8320 8226 8145 8074 8012 7955 7904 7880 7775 7687 7611 7545 7486 7386 7302 7231 7168 7112 7017 .6937 .6869 6809 .6757 6646 .6557 .6482 6419 6363 6314 .6229 6158 .6098 6045 5998 5918 5850 5793 5743 5698 5605 55.30
United Research Associates (URA) had received a contract to produce two units of a new cruise missile guidance control. The first unit
took 4,000 hours to complete and cost $30,000 in materials and equipment usage. The second took 3,200 hours and cost $21,000 in
materials and equipment usage. Labor cost is charged at $18 per hour.
The prime contractor has now approached URA and asked to submit a bid for the cost of producing another 20 guidance controls. Use
Exhibit 6.4 and Exhibit 6.5.
a. What will the last unit cost to build? (Round your answer to the nearest dollar amount.)
Cost of last unit
b. What will be the average time for the 20 missile guidance controls? (Round your answer to the nearest whole number.)
Average time
hours
c. What will the average cost be for guidance control for the 20 in the contract? (Round your answer to the nearest dollar amount.)
Average cost
Transcribed Image Text:United Research Associates (URA) had received a contract to produce two units of a new cruise missile guidance control. The first unit took 4,000 hours to complete and cost $30,000 in materials and equipment usage. The second took 3,200 hours and cost $21,000 in materials and equipment usage. Labor cost is charged at $18 per hour. The prime contractor has now approached URA and asked to submit a bid for the cost of producing another 20 guidance controls. Use Exhibit 6.4 and Exhibit 6.5. a. What will the last unit cost to build? (Round your answer to the nearest dollar amount.) Cost of last unit b. What will be the average time for the 20 missile guidance controls? (Round your answer to the nearest whole number.) Average time hours c. What will the average cost be for guidance control for the 20 in the contract? (Round your answer to the nearest dollar amount.) Average cost
Expert Solution
Step 1

Time taken to produce first unit (T1) = 4000 hoursTime taken to produce second unit (T2) = 3200 hoursLabor cost = $18

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