(a) Capacity shall be determined in terms of units of production or services or equivalent machine or man hours.
(b) Installed capacity is determined based oni) Manufacturers' technical specifications;
ii) Capacities of individual or interrelated production centres;
iii) Operational constraints or capacity of critical machines; or iv) Number of shifts
(c) In case manufacturers' technical specifications are not available, the estimates by technical experts on capacity under ideal conditions shall be considered for determination of installed capacity. In case any production facility is added or discarded the installed capacity shall be reassessed from the date of such addition or discard. ln case the same is reassessed as per direction of the Government, it shall be in accordance with the principles laid down in the said directives. In case of improvement in the production process, the installed capacity shall be reassessed from the date of such improvement.
(d) Normal capacity shall be determined vis-a-vis installed capacity after carrying out adjustments for:
i) Holidays, normal shut down days and normal idle time;
O ii) Normal time lost in batch change over;
iii) Time lost due to preventive maintenance and normal break downs of equipments;
iv) Loss in efficiency due to ageing of the equipment; or v) Number of shifts
(e) Capacity utilisation is the actual production measured as a per cent. of installed capacity.
19. Work-in-Progress and Finished Stock,- The method followed for determining the cost of work-in-progress and finished stock of the goods and for services under delivery or in-process shall be appropriate and shall be indicated in the cost records so as to reveal the cost element that have been taken into account in such computation. All conversion costs incurred in bringing the inventories to their present location and condition shall be taken into account white computing the cost of work-in-progress and finished stock. The method adopted for determining the cost of work-in progress and finished goods shall be followed consistently.