Planning and Control of Capacity Costs
In addition to the issues previously discussed, managers must take a variety of other factors
into account when planning capacity levels and in deciding how best to control and
assign capacity costs. These include the level of uncertainty regarding both the expected
costs and the expected demand for the installed capacity, the presence of capacity-related
issues in nonmanufacturing settings, and the potential use of activity-based costing techniques
in allocating capacity costs.