Capacity utilisation

Average production costs tend to fall as output ____

• deteriotes

• decreases

• drops

• rises

When a business is operating below capacity it is said to have _____

• floated capacity

• spare capacity

• excess capacity

• overflow capacity

Capacity utilisation =

• Current output / Maximum possible output x 100

• Maximum possible output/Current output x 100

• Current output + Maximum possible output x 100

• Maximum possible output - Current output x 100

By working at ____ capacity it means that the business has no room in order to increase output

• lower

• medium

• under

• over

By working at over capacity staff are likely to be put under ________

• a hierarchy of needs

• fringe benefits

• excessive pressure

• gross misconduct

By not producing at maximum capacity it may mean that the business is unable to full exploit _____.

• absenteeism

• gross profit margins

• diseconomies of scale

• economies of scale

By not producing at full capacity it allows the business ____

• to achieve lean production

• some slack

• to achieve maximum efficiency

• to improve producivity

Way to improve capacity utilisation = ???

• More time to service and fix machinery

• Increase workforce hours

• Sell machinery

• Shorter factory opening hours

Capacity utilisation shows how much of the company's resources ____

• need replacing in the foreseeable future

• are worth on the statement of financial position

• are profitable

• are actually in use

To avoid ____, employees need to be trained to check quality at every stage of the process and to send work back if it is faulty.

• output

• waste

• productivity

• efficiency