CAPACITY DETERMINATION - (REVISED 2012)

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..... . In this Standard, the standard portions have been set in bold italic type. These are to be read in the context of the background material, which has been set in normal type. 1. Introduction: 1.1 This standard deals with the principles and methods of determining the capacity of a manufacturing facility of an entity. 1.2 Capacity is determined for assignment of overheads to cost objects. Princi .....

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..... dle Capacity: Abnormal idle capacity is the difference between normal capacity and actual capacity utilization where the actual capacity is lower than the normal capacity. 4.2 Actual Capacity Utilization: Actual Capacity Utilization is the volume of production achieved in a specified period, expressed as a percentage of installed capacity. 1[4.3 Cost Object: This includes a product, service, cos .....

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..... mined in terms of units of production or equivalent machine or man hours. 5.2 Installed Capacity: Installed capacity is determined based on: (i) Manufacturers' Technical specifications (ii) Capacities of individual or interrelated production centres. (iii) Operational constraints/capacity of critical machines (iv) Number of shifts In case manufacturers' technical specifications are .....

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..... iii) Time lost due to preventive maintenance and normal break downs of equipments, (iv) Loss in efficiency due to ageing of the equipment, (v) Number of shifts. 5.4 Capacity utilization: Capacity utilization is actual production measured as a percentage of installed capacity. Actual production refers to in-house production. 6. Presentation: 6.1 Cost Statements shall present Installed capaci .....

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..... Cost Statement or as a foot note or as a separate schedule. 7.4 Any change in the principles and methods applied for capacity determination and its impact during the period covered by the cost statement which has a material effect on the capacity determination. Where the effect of such change is not ascertainable wholly or partly the fact shall be indicated. -
Statute, statutory provisions .....

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