It is most difficult to estimate ________ because of the need to predict demand for the next few years.
A) practical capacity
B) theoretical capacity
C) master-budget capacity utilization
D) normal capacity utilization

Question

Quizplus · Accepted Answer

Normal capacity utilization is the maximum level of output that a company can sustainably achieve given normal operating conditions. Estimating normal capacity utilization is difficult because it requires predicting demand for the next few years, which can be uncertain. Practical capacity refers to the maximum production level a company can achieve under ideal conditions, theoretical capacity is the maximum output possible without any interruptions or downtime, and master-budget capacity utilization is the planned utilization of a company's resources for a given budget period. While estimating these capacities can also be challenging, they do not necessarily require predicting demand for the future.

It Is Most Difficult to Estimate ________ Because of the Need