Which of the Following Measures Capacity Levels in Terms of Demand

question 28

Multiple Choice

Which of the following measures capacity levels in terms of demand for the output of the plant?

• A) practical capacity and theoretical capacity
• B) theoretical capacity and normal capacity utilization
• C) normal capacity utilization and master-budget capacity utilization
• D) master-budget capacity utilization and practical capacity

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Definitions:

Plant Assets

Long-term tangible assets used in the production of goods and services, such as buildings, machinery, and equipment.

Cash Flows

The net amount of cash and cash equivalents being transferred into and out of a business.

Operating Activities

Activities that relate to the primary operations of the company, including cash flows from selling goods and services.

Indirect Method

A way of presenting the cash flow statement where net income is adjusted for changes in balance sheet items to calculate cash flow from operating activities.