A company can produce a product the first time at a cost of $2,500. If its 85 percent learning curve allows the company to reduce its costs on each product, what is the total cost of producing 400 units of the new product?
Fill in the blank(s) with the appropriate word(s).
$319,000
Using Table 6.5, with an 85 percent learning curve, where the first unit costs $1, the cumulative cost to produce 400 units is $127.60. In a situation where the first unit cost $2,500, the total cost for 400 units will be $2,500 times 127.60 or $319,000.
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