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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 $40,000 in materials and equipment usage. The second took 3,600 hours and cost $32,000 in materials and equipment usage. Labor cost is charged at $20 per hour. The company expects “learning” to occur relative to labor and also the pricing of parts from suppliers.

The prime contractor has now approached URA and asked to submit a bid for the cost of producing another 20 guidance controls. Use Exhibit 4A.5 and Exhibit 4A.6.

a. What will the last unit cost to build? (Round your answer to the nearest dollar amount.)

b. What will be the average time for the 20 missile guidance controls? (Round your answer to the nearest whole number.)

c. What will the average cost be for guidance control for the 20 in the contract? (Round your answer to the nearest dollar amount.)

Sagot :

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