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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › chapter 7 question 3
hello,
In the question 3 in chapter 7 practice questions, I am confusing that why the answer of the capacity ratio is been simply actual hours / budgeted hours although each hours have different units produced. the budgeted 8000 hours is regarding of 20,000units and the actual hours is regarding of 25,000units.
I thought that
since they are different hours to produce per unit,
8000hours / 20,000 unit= 0.4 budgeted hours per unit
and 0.4hours x 25,000= 10,000, which is budgeted hours to produce 25,000.
therefore, 11,000 (actual hours) / 10,000 ( budgeted hours) = 1.1
1.1 x 100 = 110%
which mistake did i make sir??
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