Respuesta :
Master-budget capacity utilization is the level of capacity utilization that managers expect for the current budget period, which is typically one year.
Select a capacity method that produces sense to you, and use that as a tool to plan production and spending. Normal capacity utilization is the level of capacity needed to fulfill customer demand over several years.
Budget capacity is that the denominator-level concept supports the expected level of capacity utilization for the budget period. There are four choices of capacity levels: theoretical capacity, practical capacity, normal capacity utilization, and master-budget capacity utilization.
It's the extent of capacity utilization that satisfies average customer demand over a period that features seasonal, cyclical, and trend factors. A low capacity utilization rate will lead to a decrease in price because there is excess capacity and insufficient demand for the output produced.
Economies with a capacity ratio of much but 100% can significantly boost production without affecting the associated costs. The capacity ratio is thus a measure of solvency during which availability for a selected year is split by the position needed for that very same year. Inserting different numbers into each of those parameters facilitates projections for future capacity.
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