CMA Final · Strategic Cost Management · Learning Curve
A Chennai manufacturer's production follows an 80% cumulative average-time learning curve. The first unit takes 10 hours. How many hours will the 3rd and 4th units take together?
Units 3 and 4 together take 9.6 hours. The first 4 units take 25.6 hours in total (4 × 10 × 0.64) and the first 2 units take 16 hours (2 × 10 × 0.8). The difference, 25.6 − 16, is 9.6 hours.
- A6.4 hours
- B9.6 hoursCorrect
- C12.8 hours
- D16.0 hours
Explanation
The total for 4 units is 4 × 10 × 0.8² = 25.6 hours. The total for 2 units is 2 × 10 × 0.8 = 16 hours. Units 3 and 4 together take 25.6 − 16 = 9.6 hours. The 6.4-hour option is only the average time per unit for the first 4 units, and 16 hours is the time for the first two units.
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