________ is based on the demand for the output of the plant.
A)Practical capacity
B)Budgeted capacity utilisation
C)Normal capacity utilisation
D)Both B and C are correct.

Question

Quizplus · Accepted Answer

Budgeted capacity utilisation is the expected level of capacity utilisation based on the demand forecast, while normal capacity utilisation is the long-term sustainable level of capacity utilisation based on the design of the plant and the nature of the demand for its output. Both are based on the demand for the output of the plant, making option D the correct answer. Practical capacity, on the other hand, is the maximum possible output that can be produced under ideal conditions, regardless of demand.

________ Is Based on the Demand for the Output of the Plant