What formula represents the labour activity ratio?

The labour activity ratio is a key performance measure that assesses the efficiency of labor within a production process. It provides insight into how well labor resources are utilized compared to what was planned.

The correct representation of the labour activity ratio is described by comparing the standard hours for production against the budgeted hours. When you divide standard hours for production by budgeted hours, you gain an understanding of the efficiency of labor in terms of the expected output in relation to the planned amount of work. This helps businesses gauge whether their labor resources are being used effectively in terms of productivity.

In this context, the other potential answers do not accurately represent the labour activity ratio. For instance, the first option compares actual output to standard hours, which relates more to productivity measurement rather than activity ratio. The third option flips the relationship entirely, examining budgeted hours against actual hours worked, which leads to a different kind of analysis. The last option evaluates the actual hours worked in relation to standard hours for production, which might indicate efficiency but still doesn't align with the definition and purpose of the labour activity ratio.

Thus, the specific focus on standard hours for production relative to budgeted hours accurately conveys the goal of assessing labor efficiency within the production process, making it the correct choice.