The Ratio of Actual Output to Design Capacity Is

question 13

Multiple Choice

The ratio of actual output to design capacity is:

• A)design capacity.
• B)effective capacity.
• C)actual capacity.
• D)efficiency.
• E)utilization.

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Definitions:

Note Disclosure

Informative notes accompanying financial statements, explaining the basis of preparation and detailing specific accounting policies.

Capital Lease

A long-term lease agreement that is classified as a purchase by the lessee for accounting purposes because it effectively transfers substantially all the risks and rewards of ownership.

Present Value

The current worth of a future sum of money or stream of cash flows, given a specified rate of return.

Lease Payments

Periodic payments made by a lessee to a lessor for the use of an asset under a lease agreement.