Demonstrated capacity is average, not maximum, output and depends on the utilization and efficiency of work center.
_______________ provides a picture, in the form of a diagram, of what actually happens when a product is made or a service performed.
There are two ways to determining the capacity available; out of which is figured from historical data and is based on available time, utilization and efficiency.
A company ships a particular product to a market located 1000 miles from the plant at a cost of $4 per mile. Normally it ships 500 units at a time. If the company can ship the units unassembled, it can ship 800 units in a truck. What is the line-haul cost per unit now?
