Economics · Labor Ratios
In Quarter 3, a company calculated its Capacity ratio as 120% and its Efficiency ratio as 110%. Which of the following options correctly matches the explanations to these operational results?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Capacity ratio explanation: Labor hours produced more units per hour than budgeted; Efficiency ratio explanation: More labor hours were worked than budgeted.
- 2Capacity ratio explanation: More labor hours were worked than budgeted; Efficiency ratio explanation: Labor hours produced more units per hour than budgeted.✓
- 3Capacity ratio explanation: Labor hours produced fewer units per hour than budgeted; Efficiency ratio explanation: Fewer labor hours were worked than budgeted.
- 4Capacity ratio explanation: Fewer labor hours were worked than budgeted; Efficiency ratio explanation: Labor hours produced fewer units per hour than budgeted.
Correct answer
Capacity ratio explanation: More labor hours were worked than budgeted; Efficiency ratio explanation: Labor hours produced more units per hour than budgeted.
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