Stanley Electronics Products, Inc., finds that new product production is affected by an 80 percent learning effect. The company has just produced SO units of output at 100 hours per unit. Costs were as follows:
|
Materials @ $20 |
$1,000 |
|
Labor and labor related costs: |
|
|
Direct labor 100 hours @ $8 |
800 |
|
Variable overhead 100 hours 0 $2 |
200 |
|
$2,000 |
The company has just received a contract calling for another SO units of production. It wants
to add a 50 percent markup to the cost of materials and labor and labor related costs. Determine the price for this job.