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sweet-ann [11.9K]
3 years ago
5

Hoosier Manufacturing operates a production shop that is designed to have the lowest unit production cost at an output rate of 1

60 units per hour. In the month of July, the company operated the production line for a total of 295 hours and produced 34,900 units of output. What was its capacity utilization rate for the month
Business
1 answer:
soldier1979 [14.2K]3 years ago
7 0

Answer:

The Capacity utilization rate is 73.94 units per hour for the month.

Explanation:

Provided data,

Output rate = 160 units per hour

In the month of July,

Total production hour = 295 hours.

Total units = 34900 units.

Ideal output units in the month of July = output rate × total production hour

= 160 × 295

= 47200 units.

Capacity utilization rate of production shop is given by,

Utilization rate = (output unit in July ÷ idea output) × 100

= (34900 ÷ 47200) × 100

= 0.7394 × 100

= 73.94 units per hour

So, the Capacity utilization rate is 73.94 units per hour for the month.

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