In a Capacity Analysis report in time-based activity-based costing, the impact on expenses of matching capacity with demand is computed by multiplying the potential adjustment in the number of employees by the average salary per employee.

Capacity Analysis Report

A document that evaluates the production capacity of a business to understand its ability to meet product demand.

Time-Based Activity-Based Costing

An accounting method that tracks costs of activities based on the time spent on them, allowing for more accurate product costing.

Matching Capacity

The process of ensuring that a company's production capacity meets or matches the demand for its products or services, aiming for operational efficiency and customer satisfaction.