Capacity determination standard sets uniform rules for measuring installed, practical and normal capacity in cost statements. Cost Accounting Standard on capacity determination prescribes uniform principles for classifying and measuring installed, practical, normal, licenced, idle and excess capacity for cost ascertainment and disclosure in cost statements. It requires capacity to be determined in units of production, services or equivalent machine or man hours, with installed capacity based on technical specifications, technical evaluation, operational constraints and bottlenecks, and practical capacity adjusted for normal internal interruptions such as maintenance, shutdowns, holidays and setup time. Cost statements must present installed capacity, normal capacity, actual production and utilisation, together with specified disclosures on changes, outsourcing, low utilisation and abnormal cost.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Capacity determination standard sets uniform rules for measuring installed, practical and normal capacity in cost statements.
Cost Accounting Standard on capacity determination prescribes uniform principles for classifying and measuring installed, practical, normal, licenced, idle and excess capacity for cost ascertainment and disclosure in cost statements. It requires capacity to be determined in units of production, services or equivalent machine or man hours, with installed capacity based on technical specifications, technical evaluation, operational constraints and bottlenecks, and practical capacity adjusted for normal internal interruptions such as maintenance, shutdowns, holidays and setup time. Cost statements must present installed capacity, normal capacity, actual production and utilisation, together with specified disclosures on changes, outsourcing, low utilisation and abnormal cost.
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