Johnson Industries received a contract to develop and produce four high-intensity long-distance receiver/transmitters for cellular telephones. The first took 2,400 labor hours and $42,000 worth of purchased and manufactured parts; the second took 1,460 labor hours and $29,820 in parts; the third took 1,160 labor hours and $25,200 in parts; and the fourth took 861 labor hours and $20,580 in parts. The company expects â€œlearningâ€ to occur relative to labor and also relative to the pricing of parts from suppliers. Johnson was asked to bid on a follow-on contract for another dozen receiver/transmitter units. Ignoring any forgetting factor effects, what should Johnson estimate time and parts costs to be for the dozen units? (Hint: There are two learning curvesâ€”one for labor and one for parts.) Use Exhibit 4A.6.
a. How many labor hours should Johnson estimate are needed for the additional 12 units? (Round your answer to the nearest whole number.)
b. How much should Johnson estimate the parts cost will be for the additional 12 units? (Round your answer to the nearest dollar amount.)