If the Best Operating Level of a Piece of Equipment

question 13

Short Answer

If the best operating level of a piece of equipment is at a rate of 400 units per hour and the actual output during an hour is 300 units, what is the capacity utilization rate? ____________________

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Definitions:

Depreciation Expense

The methodical distribution of the expense of a physical asset throughout its expected lifespan.

Net Income

Net income is the total profit of a company after all expenses and taxes have been deducted from revenues, indicating the company's financial performance over a specific period.

Variable Costs

Costs that change in proportion to the level of activity or production volume, such as materials and labor.

Fixed Costs

Fixed costs are business expenses that remain constant regardless of the level of production or sales activities.