Homework answers / question archive / Randburg Ltd is a manufacturing company that is about to launch a new product: Product Y

Randburg Ltd is a manufacturing company that is about to launch a new product: Product Y

Accounting

Share With

Randburg Ltd is a manufacturing company that is about to launch a new product: Product Y. Details of the variable costs incurred in producing one unit of Product Y are as follows: Labour R30 per hour Materials R40 per unit Variable overheads R10 per labour hour

Additional Information Product Y is produced in batches of 25 units. The first batch of 25 units is expected to take 15 labour hours. There will be 80% learning curve that will continue until 60 batches have been produced. There after learning will stop, and the average time taken for the 60th batch will be same for the remaining batches. The total output expected is 100 batches. Required: a. Calculate the time required to produce the 60th batch of Product Y [15] b. Calculate the total variable cost of the 60th batch of Product Y [10] c. Calculate the total time take to manufacture 100 batches [5] Critically discuss the three conditions that must exist in the production process of Product Y, for the learning curve effect to be realised, use valid arguments in your answer [20]