The measuring of capacity in terms of normal capacity utilization is also termed as __________?
Correct answer: A. output demanded
- A. output demanded
- B. input demanded
- C. capacity supplied
- D. capacity borrowed
Explanation
Normal capacity is based on the expected average demand for the product over a representative period, so it reflects output demanded. It is different from capacity supplied, which concerns the resources made available.
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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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