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Why is the capacity decision important? The capacity decision is important for several reasons 1) capacity costs represent a large portion of fixed costs 2) a facility of the wrong size means that costs are not as low as they could be 3) If a facility is too large, and portions of it remain idle, the firm's costs are too high because of the higher fixed costs 4) If a plant is too small, costs are again higher than they might be due to inefficiencies of working in cramped and crowded spaces 5) a facility too small may lead to lost sales perhaps even lost markets What is the correct answer is it A 1.2 and 4 B) 1.3 and 5 C 1.2,4 and 5 D 1,3,4 and 5 E) All of these 1,2,3,4 and 5 C

Question

Why is the capacity decision important? The capacity decision is important for several reasons
1) capacity costs represent a large portion of fixed costs
2) a facility of the wrong size means that costs are not as low as they could be
3) If a facility is too large, and portions of it remain idle, the firm's costs are too high because of the higher fixed
costs
4) If a plant is too small, costs are again higher than they might be due to inefficiencies of working in cramped and
crowded spaces
5) a facility too small may lead to lost sales perhaps even lost markets
What is the correct answer is it
A 1.2 and 4
B) 1.3 and 5
C 1.2,4 and 5
D 1,3,4 and 5
E) All of these 1,2,3,4 and 5
C

Why is the capacity decision important? The capacity decision is important for several reasons 1) capacity costs represent a large portion of fixed costs 2) a facility of the wrong size means that costs are not as low as they could be 3) If a facility is too large, and portions of it remain idle, the firm's costs are too high because of the higher fixed costs 4) If a plant is too small, costs are again higher than they might be due to inefficiencies of working in cramped and crowded spaces 5) a facility too small may lead to lost sales perhaps even lost markets What is the correct answer is it A 1.2 and 4 B) 1.3 and 5 C 1.2,4 and 5 D 1,3,4 and 5 E) All of these 1,2,3,4 and 5 C

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PrestonProfessional · Tutor for 6 years

Answer

E) All of these \(1,2,3,4\) and 5

Explain

## Step 1:<br />The question asks us to identify the reasons why capacity decision is important. It provides a list of reasons and asks us to select the correct combination of reasons.<br /><br />## Step 2:<br />By analyzing the provided reasons, we can see that all of them are valid reasons why capacity decision is important. <br /><br />### The reasons are:<br />1) Capacity costs represent a large portion of fixed costs.<br />2) A facility of the wrong size means that costs are not as low as they could be.<br />3) If a facility is too large, and portions of it remain idle, the firm's costs are too high because of the higher fixed costs.<br />4) If a plant is too small, costs are again higher than they might be due to inefficiencies of working in cramped and crowded spaces.<br />5) A facility too small may lead to lost sales, perhaps even lost markets.<br /><br />## Step 3:<br />Since all the reasons provided are valid, the correct answer is the one that includes all these reasons.
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