Onandomba Pty (Ltd) provides skilled labour to the construction of low-cost apartments. They have recently been asked by a builder NHE to bid for a kitchen fitting contract for a new development of 600 identical apartments. Onandomba Pty (Ltd) has not worked for this builder before. Cost information for the new contract is as follows: Labour for the contract is available. Onandomba expects that the first kitchen will take 24 man-hours to fit but thereafter the time taken will be subject to a 95% learning rate. After 200 kitchens are fitted the learning rate will stop and the time taken for the 200th kitchen will be the time taken for all the remaining kitchens. Labour costs N$15 per hour. All overheads are absorbed on a labour hour basis. Onandomba Pty (Ltd) has collected overhead information for the last four months and this is shown below: Overheads (N$) Hour worked January 115 000 9 300 February 113 600 9 200 April 116 000 9 400 May 116 800 9 600 Onandomba Pty (Ltd) normally works around 150 000 labour hours in a year. Required: Calculate total labour cost that will be needed to complete the total 600 apartments. Note: Learning coefficient should be rounded off to 3 decimals while all other answers be rounded off to 2 decimals. NB: You are not required to enter the unit or currency symbol. Enter a numerical answer with no space. For example: 1000
Onandomba Pty (Ltd) provides skilled labour to the construction of low-cost apartments. They have recently been asked by a builder NHE to bid for a kitchen fitting contract for a new development of 600 identical apartments. Onandomba Pty (Ltd) has not worked for this builder before. Cost information for the new contract is as follows: Labour for the contract is available. Onandomba expects that the first kitchen will take 24 man-hours to fit but thereafter the time taken will be subject to a 95% learning rate. After 200 kitchens are fitted the learning rate will stop and the time taken for the 200th kitchen will be the time taken for all the remaining kitchens. Labour costs N$15 per hour. All overheads are absorbed on a labour hour basis. Onandomba Pty (Ltd) has collected overhead information for the last four months and this is shown below: Overheads (N$) Hour worked January 115 000 9 300 February 113 600 9 200 April 116 000 9 400 May 116 800 9 600 Onandomba Pty (Ltd) normally works around 150 000 labour hours in a year. Required: Calculate total labour cost that will be needed to complete the total 600 apartments. Note: Learning coefficient should be rounded off to 3 decimals while all other answers be rounded off to 2 decimals. NB: You are not required to enter the unit or currency symbol. Enter a numerical answer with no space. For example: 1000
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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Transcribed Image Text:Onandomba Pty (Ltd) provides skilled labour to the construction of low-cost apartments. They have recently been asked by
a builder NHE to bid for a kitchen fitting contract for a new development of 600 identical apartments. Onandomba Pty (Ltd)
has not worked for this builder before. Cost information for the new contract is as follows:
Labour for the contract is available. Onandomba expects that the first kitchen will take 24 man-hours to fit but thereafter the
time taken will be subject to a 95% learning rate. After 200 kitchens are fitted the learning rate will stop and the time taken
for the 200th kitchen will be the time taken for all the remaining kitchens. Labour costs N$15 per hour.
All overheads are absorbed on a labour hour basis. Onandomba Pty (Ltd) has collected overhead information for the last
four months and this is shown below:
Overheads (N$)
Hour worked
January
115 000
9 300
February
113 600
9 200
April
116 000
9 400
May
116 800
9 600
Onandomba Pty (Ltd) normally works around 150 000 labour hours in a year.
Required: Calculate total labour cost that will be needed to complete the total 600 apartments.
Note: Learning coefficient should be rounded off to 3 decimals while all other answers be rounded off to 2 decimals.
NB: You are not required to enter the unit or currency symbol.
Enter a numerical answer with no space. For example: 1000
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