Normal Capacity Utilisation Is the Expected Level of Capacity Utilisation

question 20

True/False

Normal capacity utilisation is the expected level of capacity utilisation for the current budget period,which is typically one year.

---

Definitions:

Operating Assets

Assets used by a business in its daily operations to generate income, including cash, inventory, and equipment.

Fixed Costs

Refers to costs that do not change in total regardless of the level of production or sales activity, like rent, salaries, and insurance.

Balanced Scorecard

A strategic planning and management system used to align business activities with the vision and strategy of the organization, improve internal and external communications, and monitor organizational performance against strategic goals.

Performance Measurement

The process of evaluating how effectively and efficiently an organization or individual achieves its objectives.