Question

Which determine production level achivable under normal working conditions

Answer 1

· IAS-2, which deals with inventory valuation, defines normal capacity as “Normal capacity is the production expected to be achieved on average over a number of periods or seasons under normal circumstances, taking into account the loss of capacity resulting from planned maintenance”.

Answer 2

Answer:

In calculating the cost of production, fixed overheads are assigned to units produced during the period using the normal capacity.

IAS-2, which deals with inventory valuation, defines normal capacity as “Normal capacity is the production expected to be achieved on average over a number of periods or seasons under normal circumstances, taking into account the loss of capacity resulting from planned maintenance”.

Explanation:

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