Question

A manufacturing shop is designed to operate most efficiently at an output of 550 units per day. In the past month, the plant produced 490 units. What was its capacity utilization rate last month?

Short answer

Manufacturing is the activity of creating or producing items using machinery, labor, instruments, as well as chemical and biological weapons treatment and composition.

Step-by-step solution

Capital utilization

Capital Utilization refers to the production as well as manufacturing capabilities that a country, as well as organization, is using at any particular time.

Calculation

Per day output= 550 units

As a result, one month's output should be 550 x 30 = 16500 units

The plant produced at the rate of 490 / days

The net consumption = 490 x 30

= 14700 units

Last month’s utilization rate = (Net consumption / one month output) x 100

(14700 / 16500) x 100

= 89.09 %