pound density level. Changes in production density cause greater abso- 

 lute and percentage changes in assembly costs for large firms than for 

 small. 



As hauling distance increases, the costs of assembly also increase. At 

 the 5,000 point density level assembly costs increase almost 0.30 cents per 

 pound when hauling distance increases from 20 miles to 80 miles. 



Combining the costs of processing and assembly develops a more 

 complete picture of marketing costs than either of the enterprises taken 

 separately. This is because assembly costs per pound rise and processing 

 costs per pound fall as firm size increases. By combining the costs of both 

 enterprises the optimum firm size for each enterprise will be where 

 minimum combined costs of both occur. For the 1.000 pound per year 

 density level minimum costs of l)oth combined are 4.09 cents per pound 

 at the 26 million pound per year size. For the 5,000 pound density level, 

 combined minimum costs are 3.56 cents at the 70 million pound size. 

 For the most dense situation (25,000 pounds) minimum combined costs 

 were not reached in this study, but had about leveled off at 3.30 cents 

 for firm size of 70 million pounds. 



