Question: If unit 1 requires 200 hours to produce and the labor records for an Air Force contract of 50 units indicates an average labor content of 63.1 hours per unit:
Q1. What was the learning rate?
Q2. What total additional number of labor-hours would be required for a follow on Air Force contract of 50 units?
Q3. What would be the average labor content of this second contract?
Q4. Of both contracts combined? If labor costs the vendor $10/hour on this second contract and the price to the Air Force is fixed at $550 each
Q5. What can you say about the profitability of the first and second contract, and hence the bidding process in general?