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What does an activity ratio of 105% signify?
A- that the actual hours worked exceed the flexed budget
B- that the actual hours worked less than the standard hours of actual output
C- the standard hours of actual output exceeded the fixed budget hours
D- that the budgeted hours were greater than the actual hoursAssuming that the production volume ratio is activity ratio?
And it compares the number of hours to be worked to produce actual output with the total hours available for work(budgeted)
Since the ratio is 105% i assume that we have worked more hours than budgeted so the answer is c?
Please help!
Yes – you are correct.
(Why are you attempting questions for which you do not have answers? You should use a Revision Kit from one of the ACCA approved publishers – they have answers and explanations 🙂 )
I have the answers but i was confused as the answer could be A as well but then just read it was flexed budget!!
Thank you 🙂
And does equivalent units represent completed work? Please let me know 🙂
And yes, if we are given a question to find the IRR and we are given both positive NPV’s with the cost of capital can we use the same information in the formula or do we find another cost of capital to find a negative NPV that could be used for the formula?
Thanks for your help 🙂
You must start a new thread when you are asking questions about a different topic 🙂
Equivalent units are the equivalent number of completed units in terms of the cost.
You can find the IRR using two positive NPV’s
(Both of these are explained in full in my lectures – the lectures are a complete free course for F2 and cover everything needed to be able to pass the exam well.)
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