ExpertMedium2 marksMultiple Choice
ACCA · Question 11 · Budgeting and control
Section A
A shipyard is building a new class of submarine. The first submarine took 5,000 labor hours to build. The shipyard experiences an 85% learning curve.
Using the formula $Y = ax^b$ (where $b = -0.2345$), what is the cumulative average time per unit to build the first 4 submarines?
Section A
A shipyard is building a new class of submarine. The first submarine took 5,000 labor hours to build. The shipyard experiences an 85% learning curve.
Using the formula $Y = ax^b$ (where $b = -0.2345$), what is the cumulative average time per unit to build the first 4 submarines?
Answer options:
A.
4,250.0 hours
B.
3,612.5 hours
C.
14,450.0 hours
D.
3,070.6 hours
How to approach this question
Since 4 is a power of 2 (2^2), you can simply multiply the initial time by the learning rate twice: 5000 * 0.85 * 0.85.
Full Answer
B.3,612.5 hours✓ Correct
Because 4 is a doubling of a doubling (1 -> 2 -> 4), we can use the tabular method rather than the complex formula.
Average time for 1 unit = 5,000 hours.
Average time for 2 units = 5,000 * 0.85 = 4,250 hours.
Average time for 4 units = 4,250 * 0.85 = 3,612.5 hours.
Common mistakes
Calculating the total time (14,450) instead of the cumulative average time.
Practice the full ACCA PM — Performance Management Practice Exam 6
32 questions · hints · full answers · grading
More questions from this exam
Q1**Section A**
A global logistics NGO uses Big Data analytics to optimize its disaster relief sup...EasyQ2**Section A**
FinTech Innovators Inc. is migrating its management accounting systems to a public...MediumQ3**Section A**
A commercial forestry company uses an Executive Information System (EIS) to monito...EasyQ4**Section A**
SolarTech manufactures solar panels. The factory has a total operating cost of $12...MediumQ5**Section A**
A chemical manufacturing company is implementing Environmental Management Accounti...Medium