Answer
No, the difference between practical capacity and master-budget capacity utilization doesn't provide the best measure of balancing capacity costs. This is because the costs involved go beyond just having too much or too little capacity; they also include potential lost revenue and the capital tied up in plant assets.
Work Step by Step
No, the difference between practical capacity and master-budget capacity utilization doesn't provide the best measure of balancing capacity costs. This is because the costs involved go beyond just having too much or too little capacity; they also include potential lost revenue and the capital tied up in plant assets.