Hi,

As the name suggests, Learning Curve depicts the efficiency in the labor productivity achieved with each iteration or cycle, so to speak.

If you were to plot the improved efficiency after each cycle on one of the axes on a graph and the total output on the other, the answer would be total hours.

Hence, in this case, the total hours result from an 80% learning curve, meaning each iteration would improve the efficiency of the labor and reduce the number of hours spent by them.

This is one of the most frequently tested areas of the exam, and the questions can be based on various combinations. This one is the most straightforward.

In this particular case, the requirement is to ascertain the total hours. Hence the output shall be the result of the number of cycles multiplied by the units.

So 10000 * 80% * 80% * 80% = 5120 hr per unit.

Units 1 - 2- 4- 8

So it should be 5120*8 = 40960

Had the question asked a step calculation, like what is the number of hours taken to produce the units in the 4th cycle, i.e., from unit 5 to 8 in the 4th iteration, then you would have used something like the following -

No of hours till iteration 3 ( 1-2-4) = 10000*80%*80% = 6400 multiplied by the number of units produced up to iteration 3. that is 6400*4= 25600.

Hence the number of hours for the 4 iterations that produced units 5,6,7, and 8 is =40960-25600= 15360 hours.

I hope you got more clarity on the Learning Curve topic with this additional example. This is one of the many other types of questions that can be asked in the exam with an almost similar information set.

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Harjjeet Gahla (ACS LLB DBF ADM)

FInancial Controller / Accountant

Calgary Alberta

Canada

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Original Message:

Sent: 03-27-2021 01:42 AM

From: Deyaa Moabber

Subject: 1B Learning curve

Do not accumulate all results for all units. You are only required in the question to find how many hours it take to produce 8 units.

the answer will be 8*5120=40960 hours

as simple as this

hope it answered your question

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Deyaa Moabber

Chief Executive Officer

Jeddah

Saudi Arabia

Original Message:

Sent: 03-26-2021 04:31 AM

From: Phuc Ngo Mai Thien

Subject: 1B Learning curve

Hi everyone,

Could anyone help me explain the concept of the learning curve on the following question please?

Question | | | | | | |

A has developed new manufacture of a complex part. The production of the first unit requires 10,000 direct labor hours. If an 80% learning curve is used, the cumulative direct labor hours required for producing a total of eight units would be
**My Answer** |

The concept of learning says that when the output doubles, the average time will decrease from the previous level based on a constant percentage

My solution for the Question 54 is below as my understanding on the concept of learning curve

| Unit | DLH/ hour | | | | | |

| Unit 1 | 10,000 | | | | | | |

| Unit 2 | 8,000 | = 10,000 × 80% | | | | |

| Unit 4 | 6,400 | = 8,000 × 80% | | | | |

| Unit 8 | 5,120 | = 6,400 × 80% | | | | |

| | | | | | | | |

Direct labor hour to produce 8 units = 10,000 + (8,000 × 2) + (6,400 × 4) + 5,120 = | 56,720 |

The correct answer: | Unit | DLH/ unit | | | | | | |

| 1 | 10,000 | | | | | | |

| 2 | 8,000 | = 10,000 × 80% | | | | |

| 4 | 6,400 | = 8,000 × 80% | | | | |

| 8 | 5,120 | = 6,400 × 80% | | | | |

Cummulative average direct labor = 5,120 hrs/ unit | | | | |

| | | | | | | | |

Cummulative average direct labor to complate 8 units = 5,120 × 8 units = | 40,960 | hours |