# Capacity Determination
Capacity = the ability to produce. Several capacity concepts are used in overhead and idle-capacity analysis.
## Types of capacity
| Type | How it is found |
|---|---|
| Maximum / Theoretical / Installed / Rated | Units per hour × Hours per day × No. of days per year |
| Practical / Achievable | Working Days = Total Days − Holidays − Weekly offs; Practical Hours = (Practical Days × Hours per day) − Normal Idle Time; Practical Units = Practical Hours × Units per hour |
| Normal / Average / Expected | Average of past actual capacity |
| Actual | Capacity actually used during the period |
| Budgeted / Estimated | Used to set the rate / for planning |
| Idle | Normal Idle = Maximum − Budgeted; Abnormal Idle = Budgeted − Actual |
| Licensed | Capacity approved by an authority |
## Relationships to remember
- Practical capacity strips out unavoidable losses (holidays, weekly offs, normal idle time) from the theoretical maximum.
- Idle capacity splits into:
- Normal idle = Maximum − Budgeted (expected, unavoidable slack)
- Abnormal idle = Budgeted − Actual (unexpected shortfall, e.g., breakdowns)