Budgeted capacity, also known as normal capacity, refers to the productive capacity available in an organization for a budget period as stipulated in the budget for that period. This may be expressed in terms of direct labor hours, machine hours, or standard hours, providing a crucial metric for organizational planning and resource allocation.
Understanding an organization’s maximum achievable output given the available resources such as labor and machinery, under specific conditions.
Capital goods are items used in the production of other goods, including industrial buildings, machinery, and equipment, as well as highways, office buildings, and government installations. These goods significantly determine a country's productive capacity.
