345 - Economies of Scale

Economies of scale is a cost assessment based on cost per unit. Usually, economies of scale refers to increased output, i.e., the greater the quantity of a product, the lower the unit fixed-costs. Economies of scale can also refer to operational efficiencies, and for federal awards, that aspect of economies of scale is where interest lies. Economies of scale in grants can be estimated by the total cost of a project divided by the number of participants served. If a project amount is not to exceed $200,000 and the applicant plans to serve 100 participants, then the cost per participant is $2,000 each. If another applicant serves 1,000 participants for the same $200,000, the… Read More