If the actual output of a piece of equipment during an hour is 500 units and it's best operating level is at a rate of 400 units per hour, which of the following is the capacity utilization rate?

A. 0.75

B. 1.00

C. 1.25

D. 1.33

E. 100

C. 1.25

Explanation:

Mathematically;

Capacity utilization rate = actual output per hour / operating level rate per hour

Actually output per hour = 500units

Operating level rate per hour = 400

Hence,

Capacity utilization rate = 500/400

Capacity utilization rate = 1.25