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Budgeted and actual production data for the year that has just ended are as follows
Budgeted production. Actual prodProduct. Units standard machine hours. Units
W. 15000 3000. 12000
X. 20000. 8000. 25000
Y. 14000. 7000. 16000
Z. 60000. 9000. 5000Total machine hours worked in the period amounted to 29000 hours
What is the capacity and efficiency ratio in the year as a percentage to one decimal place?
Budgeted hours = 3000 + 8000+ 7000+ 9000= 27000
Capacity ratio = 29000/27000 * 100%= 107.4This one is okey understand it but the efficiency ratio am not clear how the got the standard hours of actual production this is how they worked out the efficiency ratio
Product. Units STANDARD HOURS
W. 12000. *0.2 2400
X. 25000. *0.4 10000
Y. 16000. *0.5. 8000
Z. 5000 *1.5. 7500
27900 total
Efficiency ratio= standard hours produced /actual hours worked = 27900/29000*100%
How did they work out the standard hours ???For W, you know that for 15,000 units, the standard hours are 3,000 hours.
For the actual production of 12,000 units, the standard hours are therefore 12,000 x 3,000/15,000 = 2,400 hours.
Do the same for each of the products, and add them up 🙂(I think you have mistyped the actual units for Z – it should be 50,000 (not 5,000).)
sir, the thing is if I do a gradually calculation like if I calculate hours required per unit by dividing total standard hours by total standard unit and then multiplying the same with actual units producing and then proceeding the question from there then I am getting a different result. why? please tell me.
I do not know why you are getting a different result. Type out your workings and then I will be able to explain (appreciating that the original post mistyped the number of units of Z – it should be 50,000 and not 5,000 as I explained in my reply).
I do assume that you have bought a Revision Kit from one of the ACCA approved publishers (BPP and Kaplan). If not then it is essential that you do because it is full of past exam and other exam standard questions, and question practice is vital to passing the exam.
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