Exhibit 9-11 in Exhibit 9-11, the Level of Output

question 87

Multiple Choice

Exhibit 9-11 In Exhibit 9-11, the level of output that would achieve allocative efficiency is

• A)700 units
• B)810 units
• C)884 units
• D)976 units
• E)1, 000 units

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Definitions:

Unused Capacity

The portion of a company's production potential that is not being utilized to manufacture goods or provide services.

Estimated Activity

An approximation of the amount of work or level of effort needed for a particular task or project.

Activity at Capacity

The level of operational activity that a company can achieve using its current resources without incurring additional costs.

Machine-Hours

A measure of the amount of time machines are used in the production process, often related to the allocation of manufacturing overhead.