Saturday, November 29, 2008

Control Ratio

Basically Control ratio is showing the variance between original data and budgeted data . With these ratio we can easily guess our favourable or unfavorable points in the performance .

1st control Ratio
Capacity Ratio
Actual hours worked
= ---------------------- X 100
Budgeted Hours
If it is 90% it means we can not use 10% of budgeted hours and our performance is less than our budget.
2nd Control Ratio
Efficiency Ratio = Standard hours for actual production / Actual hours worked X 100
If it is 125% it means we have increased 25% of our efficiency
3rd Control Ratio
Activity Ratio = Standard hours for actual production / Budgeted Standard hours X 100
See Also

About Accounting Education

An educational site with 2,000+ articles, solutions, video-guides and tutorials on all topics related to accounting and finance.

Get Update on Mobile

Type in your mobile phone web browser for free access anytime, from any place.The content is designed specifically for cell phones and mobile devices.

Contact Us

Contact us Send an Email Phone number and vCard LinkedIn profile Follow us on twitter