Answer to Question #66875 in Financial Math for purity

Question

Dench manufacturing has received a special order from Sands to produce 225components to be incorporated into Sand's product. The components have a high cost,due to the expertise required for their manufacture. Dench produces the components in batches of 15, and as the ones required are to be custom made to Sands' specifications, prototype' batch was manufactured with the following costs:
Materials $
4kg of A, $ 7.50/kg 30
2kg of B, $ 15kg 30
Labour
20 hrs skilled, $ 15/hr 300
5 hrs semi-skilled, $8/hr 40
Variable overhead 100
25 labour hours, $ 4/hr 500

Required
Prepare the cost estimate, assuming an 80% learning rate is experienced. (10 Marks)
Briefly discuss some of the factors that can limit the use of learning curve.