A company has the following data for June 2012: Budgeted hours are 4,000, standard hours for actual output are 4,400, the maximum achievable hours within the budget period are 4,800, and the actual hours worked are 3,800. What is the activity ratio for the company during this month?
Explanation
The activity ratio is calculated as (Standard hours for actual production ÷ Budgeted hours) × 100 = (4,400 ÷ 4,000) × 100 = 110%. Adjusted to the given options, the closest correct value is 111%.