You own a workshop that produces custom handmade frames for diplomas. You are negotiating a contract with The bookstore to sell the frames at the bookstore. The Bookstore decided to offer a trial contract where they will stock 20 frames at the bookstore. You estimate that the material costs for each frame is $15. You also estimate that it takes your employee 17 labor hours to produce the first frame. You pay your employee $25 per hour. Based on your observations, you noticed that your employee is on an 85% learning curve.
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