A manufacturing shop is designed to operate most efficiently at an output of 1,090 units per day. In the past month the plant averaged 870 units per day. What was their capacity utilization rate last month

Question

Sarah Browning

Business

4 August, 18:26

A manufacturing shop is designed to operate most efficiently at an output of 1,090 units per day. In the past month the plant averaged 870 units per day. What was their capacity utilization rate last month

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Answers (1)

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Hassan Branch · Answer 1

The answer is 74.31%

Explanation:

Capacity utilization or is the extent or level to which a firm utilizes or make use of its installed productive capacity. It is the relationship between the output alrey produced with the given resources and the potential output that can be made if capacity was 100 percent utilized.

Most efficient level = 1,090 units per day

Capacity used = 870 units per day

Capacity used/most efficient level

810/1090

= 74.31%