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Tutorial 4 - Labour Costing

This document contains 5 problems related to labor costing calculations. Problem 1 involves calculating employee earnings using hourly rates, piecework rates, and premium bonus rates. Problem 2 requires calculating gross wages and labor cost allocations. Problem 3 calculates earnings under piecework and premium bonus systems. Problem 4 deals with calculating earnings for an employee paid by differential piecework. Problem 5 involves calculating labor costs for 3 jobs with normal, evening, and weekend overtime hours.

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lejing chew
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588 views

Tutorial 4 - Labour Costing

This document contains 5 problems related to labor costing calculations. Problem 1 involves calculating employee earnings using hourly rates, piecework rates, and premium bonus rates. Problem 2 requires calculating gross wages and labor cost allocations. Problem 3 calculates earnings under piecework and premium bonus systems. Problem 4 deals with calculating earnings for an employee paid by differential piecework. Problem 5 involves calculating labor costs for 3 jobs with normal, evening, and weekend overtime hours.

Uploaded by

lejing chew
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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BBMC2413 Cost and Management Accounting

TUTORIAL 4: Labour Costing


1.) From the following information, calculate for each employee his earnings using:
(a) guaranteed hourly rates only (basic pay)
(Ans: RM228 RM144 RM200 RM272)
(b) piecework, but with earnings guaranteed at 75% of basic pay where the employee fails to
earn this amount, and
(Ans: RM228 RM140.40 RM150 RM315)
(c) premium bonus in which the employee receives two thirds of time saved in addition to
hourly pay. (Ans: RM228 RM144 RM200 RM370.67)
Employees
A B C D
Actual hours worked 38 36 40 34
Hourly rate of pay(RM) 6 4 5 8
Output(units) X 42 120 - 120
Y 72 76 - 270
Z 92 - 50 -

Standard time allowed (per unit)


X - 6 minutes, Y 9 minutes, Z 15 minutes.
Each minute earned is valued at RM0.10 for piecework calculation.

2.) A, B, C, D, E and F are the operatives employed in a machine shop. G is the shop foreman
and H is employed on materials handling duties.

Clock cards for week ended 30 April showed the following hours of attendance:
Mon Tues Wed Thur Fri

A 8 9 8 10 9
B 8 8 8 8 8
C 8 8 8 8 8
D 9 8 8 8 9
E 8 9 10 9 8
F 10 8 9 8 9
G 10 9 10 10 9
H 10 9 10 10 9

The hours worked in excess of 8 on any day are paid at'time and a half, such overtime being
necessary to enable the firm to meet the general pressure for delivery of customers' orders.

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BBMC2413 Cost and Management Accounting

Operatives` time sheets show time spent as indicated below, any unallocated time being
regarded as idle time.

Production Job No. Shop Machine


123 327 469 518 719 842 917 Sweeping Repairs

A 11 4 15 1 8 3 2 -
B - 19 - 12 4 - 3 1
C 6 10 10 10 - - - - 3
D 10 9 7 - 12 4 - -
E 8 9 8 5 9 3 2 -
F 14 5 8 8 8 - 1 -

Hourly rates of pay are: A- RM1.32; B- RM1.32; C- RMI.26; D RMI.38; E- RM1.26; F RM


1.26; G RM I.50; and H RM 1.20.

Required:
Prepare statements for the week ended 30 April showing: -
(a) The gross wages for each employee; and
(Ans: RM60.72 RM52.80 RM50.40 RM59.34 RM57.96 RM57.96 RM78.00
RM62.40)

(b) An analysis of the total wages paid to direct labour and to each of the overheads
concerned. (Ans: RM322.44 RM157.14)

3,) The following information is available:


Normal working day 8 hours
Guaranteed rate of pay (on time basis) RM5.50 per hour
Standard time allowed to produce I unit 3 minutes
Piecework price RM0.10 per standard minute
Premium bonus 75% of time saved, in addition to hourly pay

Required:
For the following levels of output produced in one day:
80 units
120 units
210 units
calculate earnings based on
(a) piecework, where earnings are guaranteed at 80% of time-based pay;
(Ans: RM35.20 RM36 RM63)

(b) premium bonus system. (Ans: RM44 RM44 RM54.30)

2
BBMC2413 Cost and Management Accounting

4.) A worker is paid by differential piecework. The scheme is as follows:


up to 50 units per day RM0.50 per unit
51-70 units per day RM0.60 per unit
71-80 units per day RM0.65 per unit
81-100 units per day RM0.70 per unit

His daily outputs for a five-day week were 68 units, 83 units, 59 units, 94 units and 47 units. What
will be his gross pay for the week? (Ans: RM188.60)

5. A firm's basic rate is RM3 per hour and overtime rates are time and a half for evenings and
double time for weekends. The following details have been recorded on three jobs.

Job X321 JobX786 JobX 114


Clock hours Clock hours Clock hours
Normal time 480 220 150
Evening time 102 60 80
Weekend 10 30 16

You are required to calculate the labour cost chargeable to each of the jobs in the following
circumstances:
(a) Where overtime is worked occasionally to meet production requirements.
(Ans: RM1,776 RM930 RM738)

(b) Where the overtime is worked at the customer's request to bring forward the delivery
time.
(Ans: RM1,959 RM1,110 RM906)

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