4.2 Analysing operational performance Flashcards
1
Q
Capacity utilisation
A
Measures the extent to which a business uses its production potential.
2
Q
Capacity utilisation calculation
A
Actual output in time period/ Maximum possible output per period x 100
3
Q
Labour productivity
A
Measures the output per worker in a given time period.
4
Q
Labour productivity calculation
A
Output per time period/ number of employees
5
Q
Unit cost
A
The cost of producing one unit of a good or service.
6
Q
Unit cost calculation
A
Total cost/ units of output
7
Q
What happens if capacity utilisation and labour productivity increases
A
Unit cost decreases = fixed costs will be more spread over more units of output.
