Question : 11) A major reason for choosing ________ utilization over ________, : 1186361

11) A major reason for choosing ________ utilization over ________, is the difficulty in forecasting.

A) theoretical capacity; master-budget

B) practical capacity; master-budget

C) normal capacity utilization; master-budget

D) master-budget; theoretical capacity

E) master-budget; normal capacity utilization

12) A manufacturing firm is able to produce 2,000 pairs of shoes per hour, at maximum efficiency. There are three eight-hour shifts each day. Production is actually 1,600 pairs of shoes per hour due to unavoidable operating interruptions. The plant is expected to run every day but was only able to operate for 27 days in September.

What is the theoretical capacity for the month of September?

A) 1,488,000 shoes

B) 1,440,000 shoes

C) 1,036,800 shoes

D) 1,296,000 shoes

E) 1,152,000 shoes

13) A manufacturing firm is able to produce 2,000 pairs of shoes per hour, at maximum efficiency. There are three eight-hour shifts each day. Production is actually 1,600 pairs of shoes per hour due to unavoidable operating interruptions. The plant is only able to operate for 27 days per month due to scheduled maintenance.

What is the practical capacity for the month of September?

A) 1,488,000 pairs of shoes

B) 1,440,000 pairs of shoes

C) 1,036,800 pairs of shoes

D) 1,296,000 pairs of shoes

E) 1,152,000 pairs of shoes

14) The budgeted fixed manufacturing cost rate is the lowest for

A) practical capacity.

B) supply capacity.

C) master-budget capacity utilization.

D) normal capacity utilization.

E) theoretical capacity.

15) ________ provides the lowest estimate of denominator-level capacity.

A) Practical capacity

B) Theoretical capacity

C) Master-budget capacity utilization

D) Normal capacity utilization

E) Supply capacity

Answer the following question(s) using the information below.

A manufacturing firm is able to produce 1,000 pairs of shoes per hour, at maximum efficiency. There are three eight-hour shifts each day. Due to unavoidable operating interruptions, production averages 800 units per hour. In the month of June the plant actually operated only 25 days.

16) What is the theoretical capacity for the month of April?

A) 600,000 units

B) 720,000 units

C) 744,400 units

D) 576,000 units

E) 480,000 units

17) What is the practical capacity for the month of April?

A) 600,000 units

B) 720,000 units

C) 744,400 units

D) 576,000 units

E) 480,000 units

18) From the perspective of long-run product costing it is best to use

A) master-budget capacity utilization to highlight unused capacity.

B) normal capacity utilization for benchmarking purposes.

C) practical capacity for pricing decisions.

D) theoretical capacity for performance evaluation.

E) supply capacity to satisfy customer demand.

19) Betts Wrench Company manufactures socket wrenches. For next month the vice-president of production plans on producing 4,400 wrenches per day. The company can produce as many as 5,000 wrenches per day, but are more likely to produce 4,500 per day. The demand for wrenches for the next three years is expected to average 4,250 wrenches per day. Fixed manufacturing costs per month total $336,600. The company works 20 days a month due to local zoning restrictions. Fixed manufacturing overhead is charged on a per wrench basis.

Required:

a.What is the theoretical fixed manufacturing overhead rate per wrench?

b.What is the practical fixed manufacturing overhead rate per wrench?

c.What is the normal fixed manufacturing overhead rate per wrench?

d.What is the master-budget fixed manufacturing overhead rate per wrench?