The theoretical capacity of the company considers ideal goal of ___________?
Correct answer: C. capacity utilization
- A. normal utilization
- B. standard utilization
- C. capacity utilization
- D. actual utilization
Explanation
Theoretical capacity is the ideal maximum output with no allowance for interruptions or inefficiencies, representing 100% capacity utilization. Therefore the relevant concept is capacity utilization.
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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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