Page 214 - Microsoft Word - 00 CIMA F1 Prelims STUDENT 2018.docx

Subject P2: Advanced Management Accounting

CHAPTER 4 – LEARNING CURVES

4.1 A

Units Total time Average time/unit
1 100 100
2 190 95

Learning rate is based on the improvement in the average 95/100 = 95%

4.2 A

b
y = ax
At 200 units: y = 30 × 200 –0.2345 = 8.660; Total time = 8.660 × 200 = 1,732
minutes.

At 199 units: y = 30 × 199 –0.2345 = 8.670; Total time = 8.670 × 199 = 1,725.33
minutes

The time for the 200th unit to be used for the quotation is 6.67 minutes

4.3 49 hours

Cumulative output in batches = 110/10 = 11 batches (remember to include the
first batch of 10 already produced)

b
So, in the formula y = ax , a = time for first batch = 12 hours
x = cumulative output = 11 batches b = learning factor = -0.3219

y = average time per batch y = 12 × 11–0.3219 = 5.546 hours

so, total time for 11 batches = 11 × 5.546 = 61 hours

Since the first batch of 10 has already taken 12 hours, the next 100
(10 batches) must take 61 – 12 = 49 hours.

208