Kennywood Inc., a manufacturing firm, is able to produce 1,300 pairs of pants per hour, at maximum efficiency. There are three eight-hour shifts each day. Due to unavoidable operating interruptions, production averages 850 units per hour. The plant actually operates only 28 days per month. Based on the current budget, Kennywood estimates that it will be able to sell only 500,000 units due to the entry of a competitor with aggressive marketing capabilities. But the demand is unlikely to be affected in future and will be around 519,000. Assume the month has 30 days. What is the master-budget capacity utilization level for this budget period? O500,000 units O519,000 units 523,800 units 555,400 units
Kennywood Inc., a manufacturing firm, is able to produce 1,300 pairs of pants per hour, at maximum efficiency. There are three eight-hour shifts each day. Due to unavoidable operating interruptions, production averages 850 units per hour. The plant actually operates only 28 days per month. Based on the current budget, Kennywood estimates that it will be able to sell only 500,000 units due to the entry of a competitor with aggressive marketing capabilities. But the demand is unlikely to be affected in future and will be around 519,000. Assume the month has 30 days. What is the master-budget capacity utilization level for this budget period? O500,000 units O519,000 units 523,800 units 555,400 units
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:Kennywood Inc., a manufacturing firm, is able to produce 1,300 pairs of pants
per hour, at maximum efficiency. There are three eight-hour shifts each day.
Due to unavoidable operating interruptions, production averages 850 units per
hour. The plant actually operates only 28 days per month. Based on the current
budget, Kennywood estimates that it will be able to sell only 500,000 units due
to the entry of a competitor with aggressive marketing capabilities. But the
demand is unlikely to be affected in future and will be around 519,000. Assume
the month has 30 days. What is the master-budget capacity utilization level for
this budget period?
O 500,000 units
O 519,000 units
523,800 units
555,400 units
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