The capacity of the company, which considers the operating interruptions such as holiday shutdown and maintenance time is called ___________?
Correct answer: C. practical capacity
- A. standard capacity
- B. actual capacity
- C. practical capacity
- D. theoretical costing
Explanation
Practical capacity allows for unavoidable operating interruptions such as holidays, maintenance, and normal downtime. Theoretical capacity assumes ideal, uninterrupted operations.
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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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