ExpertMedium2 marksShort Answer
ACCA · Question 12 · Budgeting and control
Section A
AeroParts Manufacturing is producing a complex new turbine component. The first unit took exactly 200 labor hours to produce. The production manager expects a 90% learning curve to apply to this process.
Calculate the expected average time per unit for the first 4 units produced. (Enter the numerical value only)
Section A
AeroParts Manufacturing is producing a complex new turbine component. The first unit took exactly 200 labor hours to produce. The production manager expects a 90% learning curve to apply to this process.
Calculate the expected average time per unit for the first 4 units produced. (Enter the numerical value only)
How to approach this question
Use the tabular method for doubling output:
1 unit = 200 hours average.
2 units = 200 * 0.90 = 180 hours average.
4 units = 180 * 0.90 = 162 hours average.
Full Answer
Using the doubling rule for learning curves:
Cumulative Units = 1, Cumulative Average Time = 200 hours.
Cumulative Units = 2 (doubled), Cumulative Average Time = 200 x 0.90 = 180 hours.
Cumulative Units = 4 (doubled again), Cumulative Average Time = 180 x 0.90 = 162 hours.
Common mistakes
Calculating the total time for 4 units (648 hours) instead of the average time, or applying the 90% only once.
Practice the full ACCA PM — Performance Management Practice Exam 4
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