CAPACITY DETERMINATION - (REVISED 2024)

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....lity for producing goods or providing services by an entity. 1.2 This standard deals with the principles and methods of classification and determination of capacity of an entity for ascertainment of the cost of product or service, and the presentation and disclosure in cost statements. 2. Objective The objective of this standard is to bring uniformity and consistency in the principles and methods of determination of capacity with reasonable accuracy. 3. Scope This standard shall be applied to the cost statements, including those requiring attestation, which require determination of capacity for assignment of overheads. The standard may be applied for determination of capacity for any other purpose. 4. Definitions ....

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.... machine has a lower processing capacity as compared to the machines before and after it in the production line. As a result this machine becomes overwhelmed with work, causing a backlog of items waiting to be processed, slowing down the entire production process, and potentially delaying the delivery of finished products to customers. 4.4 Excess Capacity Utilization: is the difference between installed capacity and the actual capacity utilization when actual capacity utilization is more than installed capacity. 4.5 Idle Capacity: is the difference between installed capacity and the actual capacity utilization when actual capacity utilization is less than installed capacity. 4.6 Installed capacity: is the maximum ....

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....tion while determining the Installed capacity. 5.3 Achievable or Practical Capacity: Achievable or Practical Capacity is determined after suitable adjustments to the Installed Capacity. i) Time lost due to scheduled preventive or planned maintenance ii) Number of shifts or machine hours or man hours. iii) Holidays and Weekly Offs, normal shut down days, normal idle time, iv) Normal time lost in batch change over, setup, etc. v) Loss in efficiency due to ageing of the machines/ equipment vi) Any other normal Internal Factor 5.4 Reassessment of Installed Capacity: Installed capacity shall be reassessed in case of any change due to addition, deletion, modification or for a....