Question 16.2: Calculation of efficiency, capacity and production volume ra...
Calculation of efficiency, capacity and production volume ratios
The following information relates to the Frost Production Company Limited for the year to 31 March 2016:
1 Budgeted direct labour hours: 1000
2 Budgeted units: 100
3 Actual direct labour hours worked: 800
4 Actual units produced: 90
Required:
Calculate the following performance ratios:
(a) the efficiency ratio
(b) the capacity ratio
(c) the production volume ratio.
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