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Capacity utilisation

Total questions: 15

Worksheet time: 8mins

Name
Class
Date
1.

Average production costs tend to fall as output ____

a)

deteriotes

b)

decreases

c)

drops

d)

rises

2.

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

a)

floated capacity

b)

spare capacity

c)

excess capacity

d)

overflow capacity

3.

Capacity utilisation =

a)

Current output / Maximum possible output x 100

b)

Maximum possible output/Current output x 100

c)

Current output + Maximum possible output x 100

d)

Maximum possible output - Current output x 100

4.

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

a)

lower

b)

medium

c)

under

d)

over

5.

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

a)

a hierarchy of needs

b)

fringe benefits

c)

excessive pressure

d)

gross misconduct

6.

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

a)

absenteeism

b)

gross profit margins

c)

diseconomies of scale

d)

economies of scale

7.

By not producing at full capacity it allows the business ____

a)

to achieve lean production

b)

some slack

c)

to achieve maximum efficiency

d)

to improve producivity

8.

Way to improve capacity utilisation = ???

a)

More time to service and fix machinery

b)

Increase workforce hours

c)

Sell machinery

d)

Shorter factory opening hours

9.

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

a)

need replacing in the foreseeable future

b)

are worth on the statement of financial position

c)

are profitable

d)

are actually in use

10.

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.

a)

output

b)

waste

c)

productivity

d)

efficiency

11.

If a competitor leaves the market, a business may look to ___

a)

make staff redundant

b)

decrease capacity utilisation

c)

dispose of fixed assets

d)

increase capacity utilisation

12.

Sheffield Ltd produced 400,000 cars in 2021. Their factory, at full capacity, could produce 500,000 cars. What is their capacity utilisation?

a)

40%

b)

50%

c)

60%

d)

80%

13.

Average production costs tend to fall as ____

a)

output stays constant

b)

output rises

c)

output drops

d)

output decreases

14.

For most businesses, their ideal capacity utilisation is around ____

a)

70%

b)

100%

c)

90%

d)

100% +

15.

Contracting out business functions and processes to third-party providers

a)

Exsourcing

b)

Prosourcing

c)

Insourcing

d)

Outsourcing