Dress-Up Ltd is a company that specialises in designing and manufacturing suits for weddings. It takes a long time to make a suit for the first time from a new design as these suits are handmade. However, as they make more of these suits, the time to make one suit is reduced due to more experience. The following information has been provided to you by Dress-Up on a new type of suit called Police Band Suit. Cumulative production Value Direct labour needed to make the first suit 50 hours Learning curve 80% Direct labour cost R50 per hour Direct material cost R2 000 per suit Fixed costs per either sized order R5 000 Required: Using the learning curve theory and the information provided in the table above, calculate the total expected average unit cost of making: 22; 23; 24 2023 © The Independent Institute of Education (Pty) Ltd 2023 Page 6 of 6 Q.4.1 8 suits Q.4.2 32 suits
Dress-Up Ltd is a company that specialises in designing and manufacturing suits for weddings. It takes a long time to make a suit for the first time from a new design as these suits are handmade. However, as they make more of these suits, the time to make one suit is reduced due to more experience. The following information has been provided to you by Dress-Up on a new type of suit called Police Band Suit.
Cumulative production
Value
Direct labour needed to make the first suit
50 hours
Learning curve
80%
Direct labour cost
R50 per hour
Direct material cost
R2 000 per suit
Fixed costs per either sized order
R5 000
Required:
Using the learning curve theory and the information provided in the table above, calculate the total expected average unit cost of making:
22; 23; 24 2023
© The Independent Institute of Education (Pty) Ltd 2023
Page 6 of 6
Q.4.1
8 suits
Q.4.2
32 suits
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