Capacity Utilization Is Defined by Which of the Following Ratios

question 124

Multiple Choice

Capacity utilization is defined by which of the following ratios?

• A) Effective capacity/actual output
• B) Effective capacity/design capacity
• C) Actual output/effective capacity
• D) Design capacity/effective capacity

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Definitions:

Control Features

Mechanisms, policies, or procedures implemented to safeguard assets, ensure accurate and reliable financial data, and promote operational efficiency.

Voucher System

An internal control method in accounting where vouchers are prepared before payments are processed to ensure transactions are authorized and recorded properly.

Check Register

A record of transactions in a checking account, tracking all checks written, deposits made, and current balance.

Selling Company

A business entity that primarily engages in selling goods or services to consumers or other businesses.