The Cost to Manufacture One Unit of Killian Audio Products

question 22

Multiple Choice

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

• A) minimum efficient scale.
• B) lean production.
• C) Six Sigma.
• D) economies of scale.
• E) total quality management.

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