Capacity utilization

Actual output or activity divided by defined available capacity for the same period. The units and capacity basis must be stated.

Capacity utilization in round numbers

Hypothetical: a machine is used for 300 of 400 available machine-hours in one month, giving 75% utilization. A service business may use a different activity and capacity measure. Physical capacity, billable hours and their profit effects are not interchangeable.

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