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A consulting firm measures its output in a standard service hour unit, which is a function of the personnel grade levels in the professional staff.

A consulting firm measures its output in a standard service hour unit, which is a function of the personnel
grade levels in the professional staff. The variable cost is 60 per service hour. The selling price is 80 per
hour. The maximum output of the firm is 160,000 hours per year, and its fixed cost is 2,000,000 per year.

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