Hereford Company Is Planning to Introduce a New Product with an 80

Multiple Choice

Hereford Company is planning to introduce a new product with an 80 percent learning rate for production for batches of 1,000 units. The variable labor 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 batch unit time (labor hours) to produce 2,000 units based on the cumulative average time learning curve?

A) 20 hours
B) 60 hours
C) 100 hours
D) 80 hours