The Capacity Focus Concept Can Be Put into Practice Through

question 35

Multiple Choice

The capacity focus concept can be put into practice through a mechanism called which of the following?

• A) Best operating level (BOL)
• B) Plant within a plant (PWP)
• C) Total quality management (TQM)
• D) Capacity utilization rate (CUR)
• E) Zero changeover time (ZXT)

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Definitions:

High-Low Method

A cost-accounting method used to estimate variable and fixed costs based on the highest and lowest levels of activity.

Estimate

An approximation or educated guess regarding the value, quantity, or extent of something, often used for budgeting and planning processes.

High-Low Method

A way to estimate the fixed and variable components of a cost by analyzing the highest and lowest activity levels and their associated costs.

Fixed Cost

Expenses that do not change in proportion to the activity of a business, such as rent, salaries, and loan payments.