Question

A company has a factory designed for most efficiency at 15,000 units/month, with an absolute maximum output capability of 17,250 units/month and a minimum of 7,000 units/month. If the factory produces 10,925 units in October, what is the capacity utilization rate in October for this factory?

A) 37.2%
B) 56.5%
C) 63.3%
D) 72.7%

Answer 1

The capacity utilization rate in October for this factory is 63.3%.

Step-by-step explanation:

The capacity utilization rate is calculated by dividing the actual output by the maximum possible output, and then multiplying by 100 to express it as a percentage.

In this case, the actual output in October was 10,925 units and the maximum output capability of the factory is 17,250 units.

So, the capacity utilization rate in October for this factory can be calculated as follows:

Capacity Utilization Rate = (Actual Output / Maximum Output) x 100

= (10,925 / 17,250) x 100

= 63.3%