In Planning and Control of Capacity Costs, Managers Must Consider

question 106

Multiple Choice

In planning and control of capacity costs, managers must consider possible capacity measures. Which of the following measures the available supply of capacity in a factory?

• A) Theoretical capacity
• B) Practical capacity
• C) Normal capacity
• D) Master-budget capacity

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Definitions:

Logarithmic Scales

Logarithmic scales are a way of displaying data on graphs where the scale is divided according to orders of magnitude, so each step on the scale represents a tenfold change in the data.

Marginal Revenue

The increase in revenue that results from the sale of one additional unit of product or service.

Demand Curve

A graph depicting the relationship between the price of a good or service and the quantity demanded for a given period, typically showing a downward slope from left to right.

Price Elasticity

A measure of how much the quantity demanded of a good responds to a change in its price, with elasticity indicating responsiveness.