Which is considered as most stable measure of the capacity utilization?
Correct answer: D. practical capacity
- A. spiral capacity
- B. supply capacity
- C. demand capacity
- D. practical capacity
Explanation
Practical capacity allows for normal unavoidable downtime, maintenance and interruptions, making it a more stable utilization benchmark than theoretical or demand-based capacity.
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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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