Question

Hoosier Manufacturing operates a production shop that is designed to have the lowest unit production cost...

Hoosier Manufacturing operates a production shop that is designed to have the lowest unit production cost at an output rate of 120 units per hour. In the month of July, the company operated the production line for a total of 215 hours and produced 22,900 units of output.

  

What was its capacity utilization rate for the month? (Round your answer to 1 decimal place.)

  

  Capacity utilization rate %
Math   Statistics-And-Probability   
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Answer #1

Solution:-

Output Rate = 120 units/hour

No. of hours operated = 215 hours

Potential output = No of hours operated * Output Rate

                         = 215* 120 = 25800 units

Produced Output= 22900 units

Capacity Utilization Rate = Actual output/Potential output * 100%

                                    = (22900/25800) * 100%

                                    = 88.76% ...ans

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