Capacity management, denominator-level capacity concepts Cap…
Capacity management, denominator-level capacity concepts Capacity management, denominator-level capacity concepts match each of the following items with one or more of the denominator-level capacity concepts by putting the appropriate letter(s) by each item:a. Theoretical capacityb. Practical capacityc.Normal capacity utilizationd. Master-budget capacity utilization1.Measures the denominator level in terms of what a plant can supply2. Is based on producing at full efficiency all the time3. Represents the expected level of capacity utilization for the next budget period4. Measures the denominator level in terms of demand for the output of the plant5. Takes into account seasonal, cyclical, and trend factors6. Should be used for performance evaluation7. Represents an ideal benchmark8. Highlights the cost of capacity acquired but not used9. Should be used for long-term pricing purposes10. Hides the cost of capacity acquired but not used11. If used as the denominator-level concept, would avoid the restatement of unit costs when expected demand levels change
