Question

Company DEF capacity is 367,000 in a week (5 working days) producing nut. The effective capacity is 78.6% of the capacity but the actual output is 234,654. What is the rate of utilization?

Answer 1

The rate of utilization for Company DEF is 81.3%, which is calculated by dividing the actual output by the effective capacity and then converting it to a percentage.

Step-by-step explanation:

The rate of utilization is a measure of the extent to which a company uses its productive capacity. For Company DEF, this is calculated by dividing the actual output by the effective capacity and then multiplying by 100 to get a percentage.

First, we find the effective capacity by multiplying the total capacity by the effective capacity percentage:

367,000 (total capacity) x 0.786 (78.6% effective capacity) = 288,582 (effective capacity)

Now, we calculate the rate of utilization:

234,654 (actual output) / 288,582 (effective capacity) = 0.813 or 81.3%

Therefore, the rate of utilization for Company DEF is 81.3%.