Using ________ as the denominator level also gives the manager a more accurate idea of the resources needed and used to produce a unit by excluding the cost of unused capacity.
A) practical capacity
B) normal capacity utilization
C) theoretical capacity
D) master-budget capacity utilization

Question

Quizplus · Accepted Answer

Using practical capacity as the denominator level excludes the cost of unusable capacity, providing a more accurate measure of the resources actually used to produce a unit. Normal capacity utilization may include the cost of unused capacity, while theoretical capacity and master-budget capacity utilization are concepts that are not commonly used in practice.

Using ________ as the Denominator Level Also Gives the Manager