Which of the Following Statements Regarding Capacity Is NOT True

question 24

Multiple Choice

Which of the following statements regarding capacity is NOT true?

• A) Capacity can be measured in several units such as hours of output, number of units produced, number of customers served, and the like.
• B) Effective capacity is generally less than the theoretical capacity.
• C) Capacity is the maximum output that could be produced over a period of time.
• D) The maximum output of a process is not a meaningful measure.

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Definitions:

Foreign Subsidiary

A company that is partially or wholly owned and controlled by a parent company but operates in a different country.

Accounting

The systematic recording, reporting, and analysis of financial transactions of a business.

Indirect Form

Often used in reporting cash flows, an approach that adjusts net income for changes in balance sheet accounts to derive cash flow from operating activities.