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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › CAPAcity ratio
Sir should the capacity ratio be greater than 100% ?
It could be higher or lower than 100%, but a company would want it to be 100% or more.
What’s the benefit of it’s higher than 100%
And will it always be a benefit for the company if the capacity ratio is greater than 100%
Potentially if they get more labour then they are able to produce more.
But then if there is no efficiency then it’s pointkess right sir ?
Yes, which is why they will consider all of the ratios.