$"$The difference between practical capacity and$$ master$-$budget capacity utilization is the best measure of$$ management's ability to balance the costs of having too much capacity and having too little$$ capacity." Do you$$ agree? Explain.

Question content area bottom

Part $1$

A$.$

$$Yes$,$ managers face uncertainty about customer demand for their products and need to consider the difference between practical capacity and$$ master$-$budget capacity utilization in their capacity planning decisions.

B$.$

$$No$,$ the difference between theoretical capacity and practical capacity is the best measure.

C$.$

$$No$,$ the difference between theoretical capacity and normal capacity utilization is the best measure.

D$.$

$$No$,$ the costs of having too much$$ capacity$/$too little capacity involve revenue opportunities potentially forgone as well as costs of money tied up in plant assets.