NUBD, is beginning the production of a new product. Management believes that 500 labor hours will be required to complete the new unit. An 85 percent incremental unit-time learning curve model for direct labor hours is assumed to be valid. Assume the q = -0.2345. What is the total hours for 3 units? a. 1,251 b. 695.61 c. 786.87 d. 552.71

NUBD, is beginning the production of a new product. Management believes that 500 labor hours will be required to complete the new unit. An 85 percent incremental unit-time learning curve model for direct labor hours is assumed to be valid. Assume the q = -0.2345. What is the total hours for 3 units? a. 1,251 b. 695.61 c. 786.87 d. 552.71

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter8: Cost Analysis

Section: Chapter Questions

Problem 9E

See similar textbooks

Similar questions

Please indicate which multiple choice awnser is correct for question 1.1)1.2)1.3)Please indicate it correctly as I have had this awnsered with different letters to the awnser I was told 1.1 - A firm trebles its inputs and discovers that its output rises by a factor of four. This is an example of;Select one or more:a. constant returns to scaleb. diminishing returns to a variable factor c. increasing returns to scaled. economies of scale1.2 - Diseconomies of scale are present when.... Select one or more:a. marginalcostsriseb. long run average costs rise as output rises c. totalcostsfallasoutputrisesd. total costs rise as output rises 1.3 - If the demand for a firm’s product is price inelastic, this implies that Select one or more: a. price changes have no impact on quantity demandedb. a fall in price of 3% will lead to a decline in quantity demanded of more than 3%c. a rise in price will raise total expenditure on the goodd. a 5% rise in price will result in a fall in quantity…
A second firm's production function is given by the equation Q = 12L.5K.5. Input prices are $36 per labor unit and $16 per capital unit, and P = $10. a. In the short run, the firm has a fixed amount of capital, K = 9. Create a spreadsheet to model this production setting. Determine the firm's profit - maximizing employment of labor. Use the spreadsheet to probe the solution using your spreadsheet's optimizer.
Sally Statistics is implementing a system of statistical process control (SPC) charts in her factory in an effort to reduce the overall cost of scrapped product. The current cost of scrap is $X per month. If a 75% learning curve is expected in the use of the SPC charts to reduce the cost of scrap, what would the percentage reduction in monthly scrap cost be after the charts have been used for 6 months? (Hint: Model each month as a unit of production.)
If 150 labor hours were required to produce the 1st unit in a production run and 40 labor hours were required to produce the 7th unit, what was the learning curve rate during production?
1a) Suppose a firm’s TC = 50Q.75. What is Marginal Cost for the 100th unit of production? Use a spreadsheet or otherwise and incremental analysis (not calculus) to answer this question b) A firm estimates its production function as Q = 2.4 + 30*L -.5*L2 + 30*K -1.00*K2 + 15*F -.3*F2. Total cost is TC = $2.5*L + $2*K + $.75*F. The firm wishes to produce 500 units of output. Use Excel Solver or otherwise to find the cost minimizing amounts of L, K and F. What is the cost-minimizing amount of capital (K)? c) A firm’s production function is: Q = 20L -.5L2. The firm can sell all the output it wishes at $10 per unit. The wage rate for labor is PL=W=$20. a. How much labor should be hired to maximize profits? You can use either a spreadsheet, Solver (or calculus) to find the
Suppose that workmen are assembling a particular product for 40 working hours. Then they work on other products for 60 working hours before returning to the original assembly task for another 40 h and so forth. What is implied by recent research on the repeated production learning curves?
1. If Cf = 25000 is a fixed cost function, show that the average fixed cost function Cf = Cf / q is decreasing for q>0 ; therefore, when production q grows by one unit, the unit portion of the fixed cost is reduced.
Ella Co. uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs. For the month of October, Ella's estimated manufacturing overhead cost was P300,000 based on an estimated activity level of 100,000 direct labor-hours. Actual overhead amounted to P325,000 with actual direct labor-hours totaling 110,000 for the month. How much was the overapplied or underapplied overhead? Answer Format: 1,000 overapplied or 1,000 underapplied
Timothy quits his job which pays $84000 a year, to enrol in a 2-year graduate programme. His annual school expenses are $58000 for tuition, $9500 for books and 3600 for food. What core principles are considered in timothy decision making? A snowboard company currently hires 10 skilled employees who are paid a weekly wage of $1,000.00. the cost of capital is $3000 and it is fixed, which means that it does not vary with output. The company is currently producing 240 snowboards. The company’s cost will be $13,500 if it produces an additional snowboard. A customer is willing to pay $550 for the 241st snowboard. Should the company produce and sell it? What core principles are considered in the snowboard company’s decision making?
Davy Metal Company produces brass fittings. Davy's engineers estimate the production function represented below as relevant for their long-run capital‑labor decisions. Q = 500L0.6K0.8, where Q = annual output measured in pounds, L = labor measured in person hours, K = capital measured in machine hours. The marginal products of labor and capital are: MPL = 300L-0.4K0.8 ; MPK = 400L0.6K-0.2 Davy's employees are relatively highly skilled and earn $15 per hour. The firm estimates a rental charge of $50 per hour on capital. Davy forecasts annual costs of $500,000 per year, measured in real dollars. Determine the firm's optimal capital‑labor ratio, given the information above. Show your working. How much capital and labor should the firm employ, given the $500,000 budget? Calculate the firm's output. Davy is currently negotiating with a newly organized union. The firm's personnel manager indicates that the wage…
A firm estimates its production function as Q = 2.4 + 30*L -.5*L2 + 30*K -1.00*K2 + 15*F -.3*F2. Total cost is TC = $2.5*L + $2*K + $.75*F. The firm wishes to produce 500 units of output. Use Excel Solver or otherwise to find the cost minimizing amounts of L, K and F. What is the cost-minimizing amount of capital (K)? A. K=1.39. B. K=2.23. C. K=4.29. D. K=6.09. E. K=9.22.
The transition from economies of scale to dis economies of scale is more likely to occur in a manufacturing operation Select one: True False