The capacity level of operations which is less than theoretical capacity is considered as ___________?
Correct answer: A. practical capacity
- A. practical capacity
- B. theoretical costing
- C. standard capacity
- D. actual capacity
Explanation
Practical capacity is the achievable operating capacity after allowing for normal unavoidable interruptions, so it is below theoretical capacity. Actual capacity refers to what was actually produced during a period.
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About Cost Accounting
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
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