Problem 6-7 Johnson Industries received a contract to develop and produce four h
ID: 372556 • Letter: P
Question
Problem 6-7
Johnson Industries received a contract to develop and produce four high-intensity long-distance receiver/transmitters for cellular telephones. The first took 2,000 labor hours and $39,000 worth of purchased and manufactured parts; the second took 1,520 labor hours and $33,540 in parts; the third took 1,320 labor hours and $30,860 in parts; and the fourth took 1,125 labor hours and $28,170 in parts.
Johnson was asked to bid on a follow-on contract for another dozen receiver/transmitter units. (Hint: There are two learning curves—one for labor and one for parts.) Use Exhibit 6.5.
How many labor hours should Johnson estimate are needed for the additional 12 units? (Round your answer to the nearest whole number.)
How much should Johnson estimate the parts cost will be for the additional 12 units? (Round your answer to the nearest dollar amount.)
Johnson Industries received a contract to develop and produce four high-intensity long-distance receiver/transmitters for cellular telephones. The first took 2,000 labor hours and $39,000 worth of purchased and manufactured parts; the second took 1,520 labor hours and $33,540 in parts; the third took 1,320 labor hours and $30,860 in parts; and the fourth took 1,125 labor hours and $28,170 in parts.
Johnson was asked to bid on a follow-on contract for another dozen receiver/transmitter units. (Hint: There are two learning curves—one for labor and one for parts.) Use Exhibit 6.5.
Explanation / Answer
Solution:
SERIAL NO TIME COST First 2,000 labor hours $39,000 worth of purchased and manufactured parts Second 1,520 labor hours $33,540 purchased and manufactured parts Third 1,320 labor hours $30,860 purchased and manufactured parts Fourth 1,125 labor hours $28,170 purchased and manufactured partsRelated Questions
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