DRILL is a company specialized in the design and fabrication of oil drilling rigs. The...
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DRILL is a company specialized in the design and fabrication of oil drilling rigs. The sales department just received two orders from two companies A and B. The production manager of DRILL decided to deliver the first 3 fabricated rigs to Company A and the next 4 fabricated rigs (rigs 4 to 7) to company B. It took DRILL company 50,000 labor-hours to manufacture the first oil drilling rig. Assume that DRILL experiences a learning rate of 90%. At a labor rate of $100 per hour, what is the labor cost that should be charged to each company (A&B)?
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