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CAPAcity ratio

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › CAPAcity ratio

  • This topic has 5 replies, 2 voices, and was last updated 1 year ago by John Moffat.
Viewing 6 posts - 1 through 6 (of 6 total)
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  • August 24, 2021 at 8:27 am #632710
    johnbriane
    Member
    • Topics: 170
    • Replies: 160
    • ☆☆☆

    Sir should the capacity ratio be greater than 100% ?

    August 24, 2021 at 9:41 am #632724
    John Moffat
    Keymaster
    • Topics: 56
    • Replies: 51576
    • ☆☆☆☆☆

    It could be higher or lower than 100%, but a company would want it to be 100% or more.

    August 24, 2021 at 10:40 am #632727
    johnbriane
    Member
    • Topics: 170
    • Replies: 160
    • ☆☆☆

    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%

    August 24, 2021 at 2:56 pm #632751
    John Moffat
    Keymaster
    • Topics: 56
    • Replies: 51576
    • ☆☆☆☆☆

    Potentially if they get more labour then they are able to produce more.

    August 24, 2021 at 5:47 pm #632782
    johnbriane
    Member
    • Topics: 170
    • Replies: 160
    • ☆☆☆

    But then if there is no efficiency then it’s pointkess right sir ?

    August 25, 2021 at 8:47 am #632832
    John Moffat
    Keymaster
    • Topics: 56
    • Replies: 51576
    • ☆☆☆☆☆

    Yes, which is why they will consider all of the ratios.

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