Capacity requirements are computed by multiplying the number of units scheduled for production at a work center by:
A) the setup time and then subtracting the unit resource requirements.
B) the setup time and then adding the unit resource requirements.
C) the unit resource requirements and then adding in the setup time.
D) the unit resource requirements and then subtracting the setup time.

Question

Quizplus · Accepted Answer

Capacity requirements are the amount of resources needed to produce a given amount of output. The unit resource requirements represent the resources needed to produce one unit of output at a work center. Therefore, the capacity requirements would be the unit resource requirements multiplied by the number of units scheduled for production. Adding in the setup time afterwards gives the total capacity required at that work center.

Capacity Requirements Are Computed by Multiplying the Number of Units