Question

Which of the following best describes a plant operating at capacity?

a. every machine and person in the plant is working at the maximum possible rate.
b. only some specific machines or processes are operating at the maximum rate possible.
c. fixed costs will need to change to accommodate increased demand.
d. managers should produce those products with the highest contribution margin in order to deal with the constrained resource.

Answer 1

A plant operating at capacity means that every machine and person in the plant is working at the maximum possible rate.

Step-by-step explanation:

A plant operating at capacity means that every machine and person in the plant is working at the maximum possible rate.

This ensures that the plant is producing the highest level of output it can handle with its existing resources. It is a situation where the plant is efficiently utilizing its available resources to meet the demand.