The cost to manufacture one unit of Killian Audio Products' best-selling hearing aid, the Zone, is $67.50. The CFO of the company determines that if the company expands the output of its biggest U.S. plant by 20 percent, the unit cost would be only $42.50. This analysis is based on the concept of

Question

Quizplus · Accepted Answer

Economies of scale refer to the cost advantage that arises with increased output of a product, as the fixed costs are spread over more units, reducing the cost per unit.

The Cost to Manufacture One Unit of Killian Audio Products