in this question the hidden point is "incremental cost of 16th units"
hence we need to set up an algebraic equation i.e
(avg cost of 1st 8 units +avg cost of last 8 units ) /2= avg cost of total 16th units
we need to divide the the equation into three parts
- avg cost of 1st 8 units =100*.8*.8*8=51.2
- Avg cost of last 8 units ?
- Avg cost of 16 units =100*.8*.8*.8*.8=40.96
if we plug the above figure into the equation we get (51.2+ X)/2 = 40.96
X = (40.96*2)-51.2= 30.72= 31%
Note : if the question would have asked avg percentage of last 8th units then the answer would hv = 100*.8*.8*.8*.8=40.96=41%
I hope i have answered the question.
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Guruprasad Mohanty
Accountant
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Original Message:
Sent: 02-13-2021 08:30 AM
From: Mohamed Kotb
Subject: CMA PART -1 Study Group
Can any one help in this
Question: 9A learning curve of 80% assumes that direct labor costs are reduced by 20% for each doubling of
output. What is the incremental cost of the sixteenth unit produced as an approximate percentage of the first unit
produced?
A. 41%
B. 31%
C. 80%
D. 64%
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Mohamed Kotb
Other
Dammam
Saudi Arabia
Original Message:
Sent: 02-09-2021 08:49 AM
From: Guruprasad Mohanty
Subject: CMA PART -1 Study Group
Hello Guys,
I would like to create a study group for Cma Part-1, and Supposed to appear in May-June exam window.
I need to join with some study partners , who are willing for serious studies along with some serious discussions
regarding our core chapters in order to have better clarity and depth understanding.If any body interested please inbox me.
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G.Prasad
Accounts Manager
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