7Suppose that the factory of Paulo, Co. is able to produce 35,000 units of a product in a given quarter of the year, without considering unavoidable interruptions in activity. Also suppose that the quarterly company budget sets sales at 12,000 units. Then, the quantities of 35,000 and 12,000 units are respectively known as:

1. Practical capacity and master-budget capacity
2. Theoretical capacity and practical capacity
3. Theoretical capacity and master-budget capacity
4. Practical capacity and theoretical capacity