ACCA MA · Chapter 5 · Question 3 of 10
Budgeted labour hours for a period were 5,000. Actual hours worked were 4,500, and the standard hours for the output achieved were 4,800. What is the production volume ratio?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) 96.0%
Explanation
Production volume ratio = standard hours of output / budgeted hours x 100 = 4,800 / 5,000 x 100 = 96.0%. It equals the efficiency ratio (4,800 / 4,500 = 106.7%) x the capacity ratio (4,500 / 5,000 = 90.0%): 1.067 x 0.90 = 0.96.
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