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  3. marshall co. produced a pilot run of forty units o

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

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Marshall Co. produced a pilot run of forty units of a recently developed piston used in one of its products. Marshall expected to produce and sell 1,900 units annually. The pilot run required an average of 0.55 direct labor hours per piston for 40 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 640 pistons are produced Marshall's manufacturing costs for pistons are presented below. Direct labor Variable overhead Fixed overhead Materials $11.00 per direct labor hour 10.00 per direct labor hour 20.00 per direct labor hour 3.00 per unit Marshall received a quote of $7 per unit from Kytel Machine Co. for the additional 1,860 needed pistons. Marshall frequently subcontracts this type of work and has always been satisfied with the quality of the units produced by Kytel. If the pistons are manufactured by Marshall Co., the total direct labor hours for the first 640 pistons (including the pilot run) produced is calculated to be (round to two digits after the decimal point)

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