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If
Under absorbed =(3500)
Actual OHD=20%MORE THAN BUDGTED OHD’S
OAR=?
BUDGETED LEVEL OF ACTIVITY=12000
ACTUAL LEVEL ACTIVITY =10800OAR = 0.972
Absorbed Ohd – Actual Ohd = -3500
Absorbed Ohd – (Budgeted Ohd)*120% = -3500
OAR*Actual Activity – (OAR*Budgeted Activity)*120% = -3500
OAR*10,800 – OAR*12,200*120% = -3500
OAR*10,800 – OAR*14,400 = -3500
OAR*(10,800-14,400) = -3500
OAR*(-3600) = -3500
OAR = -3500/-3600
OAR = 0.972
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