Exam 23: Cost Estimation and Cost Behaviour

Abboud Company is planning to introduce a new product with an 80 percent incremental unit-time learning curve for production for batches of 1,000 units. The variable labour costs are £30 per unit for the first 1,000-unit batch. Each batch requires 100 hours. There are £10,000 in fixed costs not subject to learning. What is the cumulative total time (labour hours) to produce 2,000 units?

In the formula Y = a + bx, bx refers to the

The high-low method may give unsatisfactory results if