Theoretical capacity refers to
A)the actual activity level at which a business is operating.
B)the maximum productive output possible for a business.
C)an output level that allows for normal work stoppages.
D)the operating capacity that will meet expected sales demand.

Question

Quizplus · Accepted Answer

Theoretical capacity refers to the maximum productive output possible for a business, assuming everything works perfectly without any downtime or interruptions. This is the ideal or theoretical maximum capacity that a business can achieve, but may not always be possible to achieve in practice due to various factors such as equipment breakdowns, maintenance, employee absenteeism, etc.

Theoretical Capacity Refers to