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Explain the term dynamic steady state.
Denominator Volume
The quantity or capacity used as the denominator in allocating fixed costs to different units, often affecting the cost per unit calculation.
Theoretical Capacity
The maximum output that an organization could achieve in ideal conditions with unlimited resources and optimal efficiency.
Practical Capacity
The maximum possible output a company can produce under realistic conditions, considering normal downtime and maintenance needs.
Denominator Volume
The amount of production or activity level used as a basis to allocate fixed costs in cost accounting, affecting the per-unit cost calculations.
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