Question: Supplemental Problem on Capacity Utilization (below) Ready Manufacturing Company currently uses its normal capacity as its baseline in analyzing capacity utilization. The data for the

Supplemental Problem on Capacity Utilization (below)

Ready Manufacturing Company currently uses its normal capacity as its baseline in analyzing capacity utilization. The data for the current year is:

Current actual capacity utilization 5,000,000 pieces

Normal capacity utilization 4,500,000 pieces

Theoretical capacity utilization 20,000,000 pieces

Required: Compute the actual capacity utilization rate using theoretical capacity and normal capacity. What different message would each of these measures send to management about process performance?

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