For the developed Soil & Water Diagnostic equipment, (i) What will be the total labour cost for the first 256 equipments produced at 90%…

CA Final · Integrated Business Solutions (Multidisciplinary Case Study) · MTP · May 2025
For the developed Soil & Water Diagnostic equipment, (i) What will be the total labour cost for the first 256 equipments produced at 90% learning curve effect? (ii) What should be the revised labour cost required to achieve zero profit, and at revised labour cost what will be the cumulative average time (Revised) required per equipment for producing 256 equipments?

Suggested Answer and Working Notes:

(i) Calculation of total labour cost :- Cumulative Average Time for 256 equipments = 48.43 hrs. [112.50 × (0.908)] Total Time for 256 equipments = 12,398.08 hrs. [48.43 hrs.× 256 equipments] Total Labour Cost of 256 equipments = 2,47,961.60 [12,398.08 hrs.× 20] (ii) Calculation of revised labour cost at zero profit and cumulative average time (revised) :- Revised Labour Cost for zero profit = 3,22,961.60 [2,47,961.60 + 75,000] Total Time for 256 equipments (Revised) = 16,148.08 hrs. [3,22,961.60 / 20] Cumulative Average Time for 256 equipments (Revised) = 63.08 hrs. [16,148.08 / 256]
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