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    Measer Enterprises - Optimal Output Level Calculation

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    Measer Enterprises produces standard telephone key pads. The firm operates in a highly competitive market in which the keypads are sold for $4.50 each. Du tto the nature of the production technology the firm can produce only between 10,000 and 13,000 units per month in fixed increments of 1,000 units Measer has the following cost structure:

    Rate of Production and Sales

    10,000 11,000 12,000 13,000
    Factory Cost Variable 37,000 40,800 44,600 48,400
    Factory Cost Fixed 9,000 9,000 9,000 9,000
    Selling Cost Fixed 6,000 6,600 7,400 8,200
    Adminstration, Fixed 6,000 6,000 6,000 6,000
    Total 58,000 62,400 67,000 71,600

    Average Unit Cost
    Average Unit 5.8 5.67 5.58 5.51

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    Solution Preview

    Rate of Production and Sales

    10,000 11,000 12,000 13,000

    Factory Cost Variable 37,000 40,800 44,600 48,400

    Factory Cost Fixed 9,000 9,000 9,000 ...

    Solution Summary

    This solution is comprised of a detailed explanation and calculation to find the optimal output levels for Measer Enterprises.

    $2.19

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