The budgeted fixed manufacturing cost rate is the lowest for ________.
A) practical capacity
B) theoretical capacity
C) master-budget capacity utilization
D) normal capacity utilization

Question

Quizplus · Accepted Answer

The budgeted fixed manufacturing cost rate is the lowest for theoretical capacity because it represents the maximum output that could theoretically be achieved, spreading fixed costs over the largest possible number of units and thus reducing the cost per unit to its lowest.

The Budgeted Fixed Manufacturing Cost Rate Is the Lowest for ________