In planning and control of capacity costs, managers must consider possible capacity measures. Which of the following measures the available supply of capacity in a factory?
A) Theoretical capacity
B) Practical capacity
C) Normal capacity
D) Master-budget capacity

Question

Quizplus · Accepted Answer

Practical capacity measures the available supply of capacity in a factory, considering normal downtime such as maintenance or breaks. Theoretical capacity is the maximum output a factory can produce with no downtime, normal capacity is the average production level achieved over a period of time, and master-budget capacity is the planned level of production in the budget for a given period.

In Planning and Control of Capacity Costs, Managers Must Consider