Figure 3-9 Hereford Company Is Planning to Introduce a New Product with Product

Multiple Choice

Figure 3-9
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.
-Refer to Figure 3-9. What is the cumulative total time (labor hours) to produce 2,000 units based on the cumulative average-time learning curve?

A) 20 hours
B) 80 hours
C) 100 hours
D) 160 hours