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Labour Costing Practical Questions With Answers: Solution

This document provides examples of calculating worker remuneration under different bonus schemes. It includes 3 questions that calculate total earnings for workers producing different outputs under: 1) a bonus per 100 extra units of output, 2) straight piecework rates, and 3) the Halsey Premium Bonus system. The document also provides a multiple part question calculating daily earnings for a worker under the Halsey Premium Plan, Tailor's Differential Piece Rate system, and a 100% Bonus Plan. Solutions are provided for each part of each question.

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10K views

Labour Costing Practical Questions With Answers: Solution

This document provides examples of calculating worker remuneration under different bonus schemes. It includes 3 questions that calculate total earnings for workers producing different outputs under: 1) a bonus per 100 extra units of output, 2) straight piecework rates, and 3) the Halsey Premium Bonus system. The document also provides a multiple part question calculating daily earnings for a worker under the Halsey Premium Plan, Tailor's Differential Piece Rate system, and a 100% Bonus Plan. Solutions are provided for each part of each question.

Uploaded by

Deepsak
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Labour Costing Practical questions with

answers
Calculate total monthly remuneration of three workers: A, B and C.

(a). Standard production per month per worker 1,000 units.


(b). Actual production during the month:

A: 850 units
B: 750 units
C: 950 units

(c). Piece work rate is 10 cents per unit (actual production)


(d). Additional production bonus is $10 for each percentage of actual production exceeding
80% actual production over standard.
(e). Dearness pay fixed $50 per month.

Solution:

Total Monthly Remuneration of the Workers


Question No. 2
Production sections of a factory working on a job order system pay their workers under the
Rown Premium Bonus Scheme. Workers are also entitled to a dearness allowance of $25 per
week of 48 hours.

A worker’s basic wage is $4 per day of 8 hours and his timesheet for a week is summarised
below:

Job No. Time Allowed Time Taken

1 25 hours 20 hours

2 30 hours 20 hours
Idle time (waiting) 8 hours.
Required: Calculate Gross Wages he has earned for the week.
Solution:

Job No. 1 Job No. 2

Time Allowed 25 hrs. 30 hrs.

Time Taken 20 hrs. 20 hrs.

Time Saved 05 hrs. 10 hrs.


Bonus Hours (Rowan Plan)

Gross Earnings:
Job No. 1 $22.00

Job No. 2 23.33


Idle Time Wages (8 x .50) 4.00

Dearness Allowance for idle time (8 x .50) 4.00

Total Wages 53.33

Computation
Question No. 3
An operator engaged in machining certain components receives an ordinary day rate of $160
per day of 8 hours. The standard output for machining the components has been fixed at
$0.80 per hour (time fixed for premium bonus). On a certain day the output of the worker on
this machine is 800. Find labour cost per 100 pieces and the wages that would have been
actually earned by the workman under the following:

1: If a bonus of $19.00 is paid per 100 of extra output.


2: If paid for on straight piece work basis at the standard rate.
3: If Halsey Premium Bonus System is in use.

Solution:

Req. No. 1:
Standard output per hour = 80 pieces

Standard output per day or for


= 80 x 8 = 640 pieces
8 hours

Actual output in 8 hours or in a


= 800 pieces
day

Extra output = 800 – 640 = 160 pieces

Bonus:

For 100 extra output Bonus


= $19.00
is

For 1 extra output bonus is = $19.100

For 160 extra output bonus


= (19 / 100) x 160 = $30.40
is

Regular wages for 8 hours = $160.00

+ Bonus = $30.40

Total Wages = $190.40


Per 100 Piece Wages:

For 800 pieces wages = $190.40

For 1 piece wages = $190.40/800

For 100 pieces wages = (190.40 / 800) x 100 = $23.80

Req. No. 2: Straight Piece of Rate

=
Per piece wages = 160 / 640
$0.25

For 800 pieces =


= 800 x 0.25
wages $200

Per 100 pieces = (200 / 800) x


= $25
wages 100

Req. No. 3: Halsey Premium Bonus System


Standard time for 640 pieces = 8 hrs.
Standard time for 1 piece = 8 / 640
Standard time for 800 pieces = (8 x 800) / 640 = 10 hrs.
Time Taken = 8hrs.
Time Saved or Bonus Hours = 10 – 8 = 2 hrs.

Formula for Halsey Premium Scheme


50% of time saved = 2 x (50 / 100) = 1 hour
Regular Wages = $160.00
Bonus = (1 x 160) / 8 = $20.00
Total Earnings = 160 + 20 = $180.00
Per 100 piece Earnings = (180 / 800) x 100 = $22.50
Question No. 4
The time and motion study department of Moonlight Corporation informs you that standard
production on a certain item 40 units per hour. During the last week of December, a worker’s
record shows the following for each 8 hours day:

Monday 280 units

Tuesday 300 units

Wednesday 320 units

Thursday Factory Closed

Friday 360 units

Saturday 400 units


You are required to prepare a schedule showing the workers daily earnings, the effective
hourly rate and the labour cost per unit if the company used:

(a). The Halsey Premium Plan with a guaranteed rate of $1.00 per hour and a premium of
50% of the time saved on production in excess of standard.
(b). The Tailor’s Differential Piece Rate System with rates as follows. For standard
production and above 4 cents per unit, and below standard production 3 cents per unit.
(c). A 100% Bonus Plan and the base wage is $1.50 per hour.

Solution

(a).

(b).
(c).

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