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Marshall Co. produced a pilot run of fifty units of a recently developed piston used...

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Accounting

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Marshall Co. produced a pilot run of fifty units of a recently developed piston used in one of lits products. Marshall expected to produce and sell 1,950 units annually. The pilot run required an average of.55 direct labor hours per piston for 50 pistons. Marshall experienced an eighty percent learning curve on the direct labor hours needed to produce new pistons. Past experience indicated that learning tends to cease by the time 800 pistons are produced. Marshali's manufacturing costs for pistons are presented below Direct labor Variable overhead Flxed overhead Materials $14.00 per direct labor hour 12.00 per direct lebor hour 20.00 per direct labor hour 5.00 per unit Marshall received a quote of $9 per unit from Kytel Machine Co. for the additional 1,900 needed pistons. Marshall frequently subcontracts this type of work and has always been satisfed with the quality of the units produced by Kytel If the pistons are manufactured by Marshall Co, the average direct labor houfs per unit for the frst 800 pistons (including the pilot run) produced is calculated to be (use five decimal places in calculating the average time O 020926. O 0.21408 O0.22528 O 0.23056 0.24797

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