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Adhish Sir'S Ca Classes 1: Chapter - Learning Curve
Adhish Sir'S Ca Classes 1: Chapter - Learning Curve
Question: 1
Time required for first unit = 20 hours
Learning ratio = 90 %
Labour rate = Rs. 5 per hour
Management wants to know labour cost for the following:
(i) 4th unit
(ii) 8th unit
(iii) Labour cost for all 4 units
Question: 2
A company developing a new product makes a trial model for testing. Followed by the demonstration
model and then goes for regular production. The time taken to make the trial model is 300 hours and from
the past experience of similar models, it is known that a 90 % learning curve applies. Calculate the average
time for producing 2 units and 4 units.
Question: 3
A Ltd. introduces a new product. Since it will be produced in a new department, the first unit will require 5
direct labour hours. Direct labour cost is Rs. 5.25 per hour.
Required:
(i) Assuming a learning rate of 95 %, compute the cumulative average direct labour hours needed and the
output per hour for the 32nd unit.
(ii) Compute the direct labour cost and the direct labour cost per unit for each of the cumulative units of
production.
Question: 4
From the following data calculate average unit cost of making: (i) 4 machines and (ii) 8 machines.
Direct labour needed to make the first machine 1200 hours
Learning curve 80 %
Direct labour cost Rs. 3 per hour
Direct material cost Rs. 1,800 per machine
Fixed cost for either size order Rs. 8,000
Question: 5
If time consumed for first unit is 125 hours and learning ratio is 80 % then find average time per unit for
production of 1,000 units and 16,384 units.
Question: 6
In a parimal industry a 70 % learning curve applies. The first item of a new product took 120 hours to
make. How long should the 8th item take?
Question: 7
A & Co. has observed that a 80 % learning curve ratio applies to all labour related costs relating to Model
X, which has been recently introduced in market. It is expected that first unit will take a time of 10
minutes. What is the expected time per unit (i) When cumulative production is 20 units and (ii) When
cumulative production is 10 units?
Question: 8
Calculate the expected average unit cost of making.
(a) 4 machines (b) 8 machines
Using the data below:
Direct labour needed to make first machine: 1,500 hours
Learning curve: 80 %
Direct labour cost: Rs. 22 per hour
ADHISH SIR’S CA CLASSES 2
Direct machine cost: Rs. 1,80,000 per machine
Fixed cost for either size order Rs. 75,000.
Question: 9
XYZ Co. has observed that a 90 % learning curve ratio applies to all labour related costs each time a new
model enters production. It is anticipated that 320 units will be manufactured during 2009. Direct labour
cost for the first lot of 10 units amounts to 1,000 hours at Rs. 8 per hour. Variable overhead cost is
assigned to products at the rate of Rs. 2 per direct labour hour.
Required:
(i) Find total labour and labour related costs to manufacture 320 units of output.
(ii) Average cost of (a) the first 40 units produced (b) the first 80 units (c) the first 100 units.
(iii) Incremental cost of (a) 41 – 80 units and (b) units 101 – 200.
Question: 11
From the following information calculate average cost per unit assuming learning ratio is 90 % if (a) 4
units are manufactured and (b) 16 units are manufactured:
(i) Material cost per unit: Rs. 150
(ii) Labour cost per hour: Rs. 10
(iii) Variable overheads: 50 % of wages
(iv) Fixed overhead: 960
(v) Direct labour hours for the first unit: 10 hours.
Question: 12
If first unit requires 10 hours and learning curve ratio is 80 %, calculate the average time for 20 units, the
total time for 30 units and the time for units 31 to 40 units.
Question: 13
Yati Ltd. has got an order to manufacture 4 machines of a particular type for which two alternatives are
available: (i) Labour intensive (ii) Machine intensive. In both the alternatives cost will be as follows:
Particulars Labour intensive Machine intensive
Hours on production of first machine 2,000 800
Material cost per machine Rs. 4,000 Rs. 3,600
Direct labour cost per hour Rs. 3.00 3.00
Cost of indirect equipment per hour Rs. 1.00 Rs. 1.00
Overhead per rupee of material Rs. 0.50 Rs. 0.50
Learning curve effect 80 % 90 %
You are required to calculate:
(i) Average hours per machine for production of 1 to 4 machines under both the alternatives.
(ii) Total cost of 4 machines under both the alternatives.
ADHISH SIR’S CA CLASSES 3
Question: 14
A company has 10 direct workers, who work for 25 days a month of 8 hours per day. The estimated down
– time is 25 % of the total available time. The company received an order for a new product. The first unit
of the new product requires 40 direct labour hours to manufacture the product. The company expects 80 %
(index is – 0.322) learning curve for this type of work. The company uses standard absorption costing and
the cost data are as under:
Direct material Rs. 60 per unit Direct labour Rs. 6 per hour
Variable overheads Rs. 1 per labour hour Fixed overheads Rs. 7,500 p.m.
Required:
(a) Calculate the cost per unit of the first order of 30 units.
(b) If the company receives a repeat order for 20 units, what price will be quoted to yield a profit of 25 %
on selling price? [CA – Nov. 02]
Question: 16
XYZ & Co. has given the following data: 80% Average – Time Curve
Cumulative Average Total Marginal
Units (x) Hours Hours Hours
1 100 100 100
2 80 160 60
3 ? ? ?
4 64 256 ?
Required fill in the blanks.