If the Best Operating Level of a Piece of Equipment

question 47

Multiple Choice

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, which of the following is the capacity utilization rate?

• A) 0.75
• B) 1.00
• C) 1.33
• D) 2.33
• E) 300

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Definitions:

Direct Method

A approach used in cash flow statement preparation that lists all major operating cash receipts and payments for the period, directly showing sources and uses of cash.

Investing Activities

Transactions involving the acquisition or disposal of long-term assets and investments, as part of a company's cash flow statement.

Income from Operations

the profit generated from a company’s core business operations, excluding income from investments, taxes, and extraordinary items.

Net Cash Flows

The difference between cash inflows and outflows from operating, investing, and financing activities during a specific period.