Capacity cost rates also change when the denominator,practical capacity,changes.

Name: Capacity cost rates also change when the denominator,practical capacity,changes.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Capacity cost rates are calculated by dividing the total cost of resources used in a period by the practical capacity for that period. If the practical capacity changes, the denominator of the calculation changes, which can affect the capacity cost rates. Therefore, the statement is true.

Capacity Cost Rates Also Change When the Denominator,practical Capacity,changes