ExpertMedium2 marksShort Answer
ACCA · Question 13 · Budgeting and control
Section A
AeroBuild is manufacturing a new type of satellite. The first unit took 1,000 hours to build. An 80% learning curve applies.
What is the cumulative average time per unit to build the first 4 units? (Enter your answer as a whole number).
Section A
AeroBuild is manufacturing a new type of satellite. The first unit took 1,000 hours to build. An 80% learning curve applies.
What is the cumulative average time per unit to build the first 4 units? (Enter your answer as a whole number).
How to approach this question
Use the doubling rule for learning curves. If production doubles, the cumulative average time is multiplied by the learning rate.
Full Answer
Using the tabular method (doubling rule):
1 unit: Cumulative average time = 1,000 hours.
2 units (doubled): Cumulative average time = 1,000 * 0.80 = 800 hours.
4 units (doubled again): Cumulative average time = 800 * 0.80 = 640 hours.
Common mistakes
Calculating the total time for 4 units instead of the cumulative average time, or applying the 80% to the total time.
Practice the full ACCA PM — Performance Management Practice Exam 2
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