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3 years ago

9

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

15 units per hour. In the month of July, the company operated the production line for a total of 205 hours and produced 21,400 units of output. What was its capacity utilization rate for the month?

1 answer:

abruzzese [7]3 years ago

3 0

Answer:

90.77%

its capacity utilization rate for the month is 90.77%

Explanation:

The capacity utilisation rate can be expressed mathematically as;

Capacity utilisation rate = capacity used/Best operating level × 100%

Given;

Total Number of production time = 205hours

Production output/capacity used = 21400 units

Best operation rate = 115units/hour

Best operation output for the month of July( at best operation level )

=115units/hour × 205 hours = 23575 units

Capacity utilisation rate = 21400/23575 × 100%

= 90.77%

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