Final answer:
Economies of scale refer to cost advantages that industries obtain due to size. Products may consume overhead in different proportions due to differences in product size, setup times, and product complexity.
Step-by-step explanation:
Economies of scale refers to the cost advantages that industries obtain due to size. As the quantity of output increases, the cost per unit decreases. This means that a larger factory can produce at a lower average cost than a smaller factory.
When it comes to overhead consumption, products might consume overhead in different proportions due to differences in product size, setup times, and product complexity. These factors can impact the cost per unit and the overall efficiency of production.
For example, a larger product may require more materials and resources, resulting in higher overhead costs. Additionally, more complex products may require longer setup times or specialized equipment, leading to higher overhead consumption. Therefore, all of these factors can affect the proportion of overhead consumption for different products.