Master-budget capacity utilization
A)hides the amount of unused capacity.
B)represents the maximum units of production for current capacity.
C)provides the best cost estimate for benchmarking purposes.
D)when used for product costing results in the lowest cost estimate of the four capacity options.
E)represents the long-term utilization expected to meet customer demand.

Question

Quizplus · Accepted Answer

Master-budget capacity utilization hides the amount of unused capacity because it is based on expected production levels rather than actual or theoretical maximum capacity, which can obscure the extent of unused resources.

Master-Budget Capacity Utilization