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Question - Molton Motors makes large turbo engines. The company manufactured a prototype engine for Apex Corporation. Cost data on that engine follow:

Direct Material                                                       $22,000

Direct labor (2,000 hrs @ $20 per hour)                   40,000

Variable Mfg Overhead (based on DL cost)               24,000

Total cost                                                              $86,000

Based on experience, Molton uses an 80% learning curve (-0.3219) to calculate costs. Apex wants a quote on 15 additional motors (Molton will keep the prototype).

Calculate the variable cost of producing these fifteen motors.

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