Nov 2018 Q5 b.
Ghana National Gas Company is a gas processing company and has its plant located in Atuabo in Western Region. The Plant produces three gas products – Lean Gas (LG), Liquefied Petroleum Gas (LPG) and Natural Gas Condensate (NGC).
The standard time for the production of the products are:
LG – 40 minutes per metric tonne, LPG – 30 minutes per metric tonne, NGC – 45 minutes per metric tonne
The budget for the month of February is as follows:
LG – 45,000 metric tonnes,
LPG – 25,000 metric tonnes,
NGC – 30,000 metric tonnes
The actual data for the month were as follows:
Labour hours 70,000 hours
Production: LG – 48,000 metric tonnes,
LPG – 27,000 metric tonnes,
NGC– 25,000 metric tonnes
Required:
Compute and interpret the following:
i) The efficiency ratio. (3 marks)
View Solution
This means that actual level of production was achieved in more time than the standard time set for it. That is 5,750 hours or 8.22% is below the normal efficiency level.
ii) The capacity ratio. (3 marks)
View Solution
This means that the actual hours worked were more than budgeted hours by 7.69% or 5,000 hours.
iii) The production volume or activity ratio. (3 marks)
View Solution
This means that the actual level of production is less than the budgeted level of production by 1.16%