Answer the Following Question(s)using the Information Below

question 167

Multiple Choice

Answer the following question(s) using the information below.A manufacturing firm is able to produce 1,000 pairs of shoes per hour, at maximum efficiency.There are three eight-hour shifts each day.Due to unavoidable operating interruptions, production averages 800 units per hour.In the month of June the plant actually operated only 25 days due to avoidable shut downs.
-From the perspective of long-run product costing it is best to use

• A)master-budget capacity utilization to highlight unused capacity.
• B)normal capacity utilization for benchmarking purposes.
• C)practical capacity for pricing decisions.
• D)theoretical capacity for performance evaluation.
• E)supply capacity to satisfy customer demand.

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Definitions:

Severe Recession

An extended period of significant decline in economic activity across the economy, lasting more than a few months, characterized by high unemployment, low consumer spending, and decreased industrial production.

Depression

An extended period of significant decline in economic activity across a country or the global economy, marked by high unemployment rates, low consumer spending, and decreased industrial output.

Unemployment Rate

The portion of the workforce currently unemployed but actively searching for work opportunities.

Opportunity Cost

The foregone benefit of the next best alternative when a decision is made to choose one option over another.