Answer the following question(s)using the information below.A manufacturing firm is able to produce 2,000 pairs of shoes per hour, at maximum efficiency.There are three eight-hour shifts each day.Production is actually 1,600 pairs of shoes per hour due to unavoidable operating interruptions.The plant is expected to run every day but was only able to operate for 27 days in September.
-The budgeted fixed manufacturing cost rate is the lowest for
A)practical capacity.
B)supply capacity.
C)master-budget capacity utilization.
D)normal capacity utilization.
E)theoretical capacity.

Question

Quizplus · Accepted Answer

Theoretical capacity assumes maximum efficiency without any interruptions, leading to the lowest fixed manufacturing cost rate as costs are spread over the highest possible output.

Answer the Following Question(s)using the Information Below