10,000 hours is the amount of time required to produce the first unit. The subsequent units produced require less time.
6,400 hours is the amount of time required to produce the first unit multiplied by .82. This does not result in the cumulative average direct labor hours required per unit for production of 8 units.
8,000 hours is the amount of time required to produce the first unit (10,000 hours) multiplied by .8. This does not result in the cumulative average direct labor hours required per unit for production of 8 units.
The total number of direct labor hours required to produce 8 units is: 10,000 (2 × .80) (2 × .80) (2 × .80), or 10,000 (2 × .80)3, which equals 40,960 hours. The cumulative average direct labor hours required per unit of the product will be 40,960 ÷ 8, or 5,120 hours. The average number of hours per unit under the Cumulative Average-Time Learning Model can also be calculated by multiplying the time required for the first unit by the learning curve percentage raised to the appropriate exponent. For this problem, the calculation would be 10,000 × .80 3 = 5,120. Use of that formula can be confusing, however, since that same formula with those same amounts also results in the amount of time required to manufacture the eighth unit under the Incremental Unit-Time Learning Model. If you use that formula for a Cumulative Average-Time Learning Model problem, make sure the question is asking for the average number of hours per unit , not the amount of time required to manufacture the last unit.
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