Adam Smith described his company's process as follows: "Under ideal conditions we can produce 10,000 units a day.However,our normal production is 6,000 units a day.Today,we actually produced 8,000 units." Which of the following is true?
A)Utilization is 60 percent of maximum capacity.
B)Yield is 133 percent of effective capacity.
C)Utilization was 133 percent of effective capacity.
D)All of these are true.

Question

Quizplus · Accepted Answer

Utilization is calculated as actual output divided by effective capacity. Here, 8,000 units produced divided by the normal production (effective capacity) of 6,000 units equals 133 percent.

Adam Smith Described His Company's Process as Follows: "Under Ideal