Labour Costing cost Accounting (Seen .

VJ
66

[ 2. Labour Costing
(1)
.
Calculate the earnings of Ashok a d Bh
No. 1. No. 2 and No. 3 n
October - 2014
O d
anudas from the following particulars for a month an aIIoc
-
O
ate the labour cost to each Job
-
{is;
Ashok Bhanudas
Basic wages (~ ) 16,000
10,000
D.A. (on Basic wages) 50% 50%
Employees Contribution to P.F. (on Basic wages) 8% 8%
.
Employees contribution to E.S.I. (on Basic wages) 2% 2%
Overtime hours 10 5
Expenditure on amenities (Per Month) 250 050
The ~ormal working hours for the month are 200. Overtime is paid at double the total of Basic a nd ~:·
Contribution 10 State Insurance and P.F. are at equal rate with employees' contribution . Two workers were employ
0
~~:~~Y~s' 0·
1, No. 2 and No. 3 in the f II ·
o owrng proportions.
Name of Worker Job
No.1 No.2 No. 3
Ashok 40% 30% 30%
Bhanudas 50% 20% 30%
Overtime was done on Job No. 2
October - 2015 d
(2) A worker produced 200 units in a week's time, the guaranteed weekly wages payment for 45 hours is Rs. 405 . _The expecte time
to produce one unit is 15 minutes which is raised further by 20% under incentive scheme. What will be the earning per hour of th at
worker under Halsey (50% sharing) and Rowan Bonus Scheme? (7)
(3) From the following information Calculate the machine hour rate lo r th e mac h'rne. (S)
Rs. Rs.
Purchase price of the machine 4,50,000 Insurance premium for the machine (Per annum) .. 6,000
Installation charges 50,000 Foreman's Salary (Per annum) 60,000
Rent per quarter 30,000 Estimated repairs for the machine (Per annum) 18,000
General lighting for the total area (Per month) 2,000
Power - 2 units per hour@ Rs. 500 per 1,000 units.
Estimated life of the machine is 10 years and the estimated value at the end of the 10th year is Rs.1 Lakh .
The machine is expected to run 20,000 hours in its life time. The machine occupies 114th of the total area. The foreman
devotes 116th of his time for the machine.
(4) From the following information, calculate the earnings of a worker under the Halsey Premium Plan 50% of time saved) and Rowan
Premium Plan separately: r : : c - - - - , - - - - - - - -- - - - - - - - - - , - - - - - - - - (7)
Time taken to complete job 72 hours
nme allowed to complete job 90 hours
Per hour rate of wages Rs.25
Dearness Allowance Rs. 10 per day of 8 hours' work.
(5) Mr. Jee!, an employee of the company gets the following emoluments and benefits: (8)
Basic wages · Rs. 35,000 per month Employer's contribution to E.S.1. 4% basic
Dearness allowance 100% of basic Bonus 15% basic
Employer's contribution to provident fund 10% of basic Other allowances Rs. 42,500 p.a.
He works for 3,000 hours per annum out of which 600 hours are normal idle time. Mr Jeet worked 30 effective hours on a
job 'B' where the cost of direct material is Rs. 50,000 and overheads are 60% of combined cost of material and labour. The
sale value of a job is quoted to earn profit 25%° on cost.
You are required to find out Effective hourly cost of Mr. Jeet and the Expected sales value of job. 'B'
October - 2016
(6)
0-80
costto each Job no 100 and Job no. 101.
Particulars
0
Calculate the earnings of Rakesh and Ramesh from the following particulars for the month of March 2016 and allocate the labour

Rakesh Ramesh
(15)

Basic wages 15,000 18,000

D. A. (On Basic) 80% 80%
Employees Contribution to P.F. (On Basic) 10% 10%
Employees Contribution to E.S.l. (On Basic) 3% 3%
Overtime hours 18 15
Expenditure on amenities (Per month) 600 noo
 i 'M CoSI Accounting (Sem . V)
07

Tho Normol working hours lor lh

contrlbulion to Stato lnsuronco (E.S.I) in:~nt nro 225. Ovortlmo 18 paid ot doublo tho total of basic and D.A. Employor·o
on Job No. 100 ond Job No. 101 In the foll '1 • oro ot oqual rato with omployoos' contribution There were two workers omploycd
- N
amo of Worker
ow ng orooortlon
· --
R8kesh Job No.:J_OO
40%
- Job No. 101
60%
Ramosh 80%
20%
ovortlmo was dono on Job No. 100.
(7)
(7) Tho following ore tho dotoils as roaa rds a work h
l - ~ J~o~b~N~o~~~ o~
rw~ o~w
~ or~k~
e d~fo~r~Jo~b~N
~o~.._;_4~4~41a~nsld_§
_ 5§_
55~.- -- -
- · ·- Time allowed Time taken
444 26 hours - - 20 hours
655
His normal basic rato o·f, -w_a_g_
es_w
..:~
as· , 30 hours 20 hours
Calculate tho amount payablo hi 80 per day of 8 hours and his dearness allowance was~ 240 per week of 48 hours.

(I) On Tlmo basis, (II) On Halsey

10
p:·n basls (Bonus at 50% of Time saved) and (Ill) On Rowan Plan basis.

(7)
(8) Calculate earnings of a worker under Halsey Premium April
Time taken Plan and· 2017
Rowan Premium Plan from the following:
H 60 hours Time allowed 75 hours
ourIy rato Rs 25 per hou 0 (15)
(9) Mr. Vasudeo, an employee of XYZ Ltd · r eamess allowance Rs. 50 per day of 8 hours' work
· 0 ets the followlno emoluments & benefits:
Basic wages Rs. 42,000 por month * a
=
%mem
Dearness allowance SO%of Basic
Employees Contribution to Provident Fund 10% of Basic
Employees Contribution to E.S.I. 4%of Basic
QB STI Bonus 20%of Basic
✓ Other allowances Rs 36 ooo o a
Mr. V(~~d~)o ;or 2000 hours per annum, out of which 200 ho~rs' are ~~rmal idle time. Employer's contribution to State
nsurance · · · an • • are at equal rate with employees' contribution. Mr. Vasudeo worked 25 effective hours on a job No. 5
1
where the cost of direct material is Rs. 60,000 and overheads are 80% of combined cost of material & labour. The sale vale of job
1s quoted to earn profit 20%gon sales.
You are required lo find out effective hourly cost of Mr. Vasudeo and expected sales value of job No. 5.
Calculate the earnings of a worker under Time rate, Rowan system & Halsey system, form the following information. (7)
(10) A Worker·~ wag~s for a guaranteed 48 hours week is Rs. 75 per hr. The estimated time to produce one article is 30 minutes
and under an incentive plan , the time allowed is increased by 20%.
During a week, a worker produced 100 articles.
October - 2017 (15)
(11) Mr. Ashish, an em lo ee of the com an ets the followin emoluments an,;.de-b=-e=-n...ce_fit;.:cs_· - - ~ - - - - - -
t 600 per month
Basic wages ? 40,000 per month Cost of amenities

I Dearness allowance 90%of basic

Em lo ee's contribulion to rovidenl fund 12% of basic LO
Bonus
=
=-l:.:.he:.:.r.::.a:.:.
He works for 2,800 hours per annum. out of which 800 hours are normal idle time.
llo::.:w=-
an.:.:c=-
10%of basic
e_--1..?
.:.....:.:
45::.,::.;
OOO ~P:..:·a::.._ _ j

Employer's Contribution to P. F. is at equal rate with employees' contribution. Ashish worked 40 effective hours on a job• 'A'
where the cost of direct material is t60,000 and overheads are 50% of combined cost of material and labour. The sale value of job

00
is quoted to earn profit 20% on sales.
00 -
You are required to find out Mr. Ashish's total earnings, ellectiv~ hourly cost and the Expected sales value of job. 'A'.
(12) A Worker worked In a factory and he is getting his wages where company is following Halsey Method (50%) of Remuneration . A
worker's weekly wages is ?1440 for 48 hours plus a cost of living bonus is ?10 per hour. He is given task which he is expected to
complete in 8 hours . He could complete 1hat task in 7 hours. What would be his total hourly rate of _ earnings? Also calculate his
total earnings ii company would have opted Rowan Plan. (7)
April - 2018
(13) Mr. Amar, an employee of the company aets the foflowinq emoluments and benefits: (8)
Basic wages Rs. 40,000 per month
✓ Dearness allowance 90% of basic
Employer's contribution to Providenl fund 10% of basic
Employer's contribution 10 E.S.I. 4% of basic
Bonus 10% of basic
Olher Allowances Rs. 45,000 p.a.
He works for 2,800 hours per annum , oul of which 800 hours are normal idle time. Amar worked 40 effective hours on a job •
'A' where the cost of direct material is Rs. 60,000 and ov~rheads are 50% of combined cost of material and labour. The sale value

of job is quoted to earn profit 20% on sales.

You are requi red to find out Effective hourly cost of Mr. Amar and the Expected sales value of job · 'A'.
 Cost Accounting (S-.
labour Costing '1™ 68 "'" ·v1
(14) F • . t the cost of wages for the month at
·
ram the following Information, find out the net wages payable In cash an d also find OU
()J
January, 2016:
Particulars Rs.
Basic wages per monlh 40,000
Dearness allowance (110%on Basic) -
Total amount deposited to P.F. 12,000
Total amount deposited to ESI 4,500
Expenses on amenities 4,000
Recovery of staff quarter rent 3,000
Recovery for provisions sup~ lied 2,500
. f employer's and employee's share into
Employer's contribution to P.F. is equal to that of employees contnbutIon. The ratio 0
the contribution to ESI is 2:1. (7)
(15) From the following , Calculate total earnin of a worker under Rowan Plan and Halse Plan.
Monthly wages Rs. 5,760
Monthly hoers 192
Cost of iiving bonus per hour Rs. 40
Time allowed to complete the work (in hours) 320
Time taken to com lete the work (in hours) 280 (7)
(16) Calcu late Machine hour rate from the following data.
5
Identical machines in the shop
Rs. 32,000
Cost of Machine
Rs. 8,000
Residual value after the expiry of the useful life of 10 years ho
Power consumption p.a. as per meter reading (each machine uses 10 units ol power @ 0.50 paise per unit per ur) Rs. 30,000
Repair &Maintenance for 5 machines p.a. Rs. 6,000
Rent &Rates for the shop p.a. Rs. 24,000
Lighting for the shop p.a. Rs. 2,400
Supervision : (Two Supervisor for shop, Salary being Rs. 2,000 p.m. each) -
Canteen expenses for the shop p.a. Rs. 1,200
Hire Purchase annual instalment paJ'able for machines (including Rs. 600 as interest) Rs. 2,500
October - 2018
(17) Calculate the earnings of Sky and Blue from the following particulars for a month and allocate the labour cost of each job R,
-
Sand T: (8) O -

Particulars Sky Blue

Basic Wages Rs. 200 Rs. 320
Dearness Allowance 50% 50%
Contribution to Employee State Insurance (On Basic Wqges) 2% 2%
Conlribulion to Provident Fund (On Basic Wages) 8% 8%
Overtime (Hours) 10 -
The normal working hours for the month are 400. Overtime Is paid at double the total of normal wages and dearness
allowance. Employer'. s and Employee's contribution to State Insurance and Provident Fund are at equal rates. The Two workers
were employed on Job R, S and T ·In the foII owin · g proportions
· :
Worker Jobs
R s I T
Sky 40% 30% 30%
Blue 50%
Overtime was done on Job S at the request of customers.
20% 30% I
(18) Calculate the earnings of a worker using Halsey and Rowan Plan based on the following information: (7)
Time allowed to complete the job 180 hours ·
Time taken to complete the job 144 hours
Rate of Wages per hour Rs. 20
Dearness allowances is Rs. 40 per day of eight hours.
(19) The standard time fixed for a job is 40 hours_and the wage rate is Rs. 40 pe'r hour. The worker completed the job in 32 hours.
Calculate the wages and effective rate of earnings per hour as per Halsey Premium plan and Rowan Premium plan. ( )
7
April-2019
(20) Mr. Mahendra, an employee of the company gets the following emoluments and benefits:
Dearness Allowance 100%of basic r,E~m: p:;;lo:::ye:::r;' s-:
: co:::n:;:tr:ib::::
:;: ut;io::
: n::to:--;P:;:ro::v:;:id;::e::
nt:--;:F::--un:::d;--,---:- 1o=--%
...:.....
of_b_a_
si-c -:.... (8)
Basic Wages f52,500 per month Other Allowance f63,750 per annum
Employer's conlribution to ES.I. 4%of basic Bonus 15% of basic
He works for 4,500 hours per annum, out of which 900 ho'~U;:-rs;;-:-
a:::re:-:n:::o~r=m::a:, I ::;
1dii::
1e:-:t"im::e
- =-.- -----l--.......'.~ ~~!:......__J
LBt,OU' cosllna cosl Accounting (Sem • V)
69 .
Mr. Mahendra worked 4S elf
mbined cost of material and becllve hours on a Job 'T' h . • and overheads are 60% of
CO Ia our. The sal w ere the cost of direct matenal Is , 75 ,000

( ) caiculate the total earnln of two workers u

21 Standa rd Time Allowed
l
You ere required lo find out effective houri° value of Job Is quoted to earn profit 25% on cost. , ,
cost of Mr. Mahendra end the expected sales value of job T ·
n er Halse Premium Plan and Rowan Premium Plan from the following p
. articulars· (7)
·
Rate ol wages SO Hours
Actual Time Taken t10 per hour
Worker A: 45 Hours
(22 ) from the followlng Particulars, comoute M Worker B: Hours (8)
Cost of Machine achlne Hour Rate:
Depreciation ,2.so,000
15%p.a. on original cost
Power consumption 2 units per hou @t0.75 per unit
Insurance r
Repairs '10,000 p.a.
tS,000 p.m.
Consumable stores
t2,500p.m.
Rent
t3,00,000 p.a.
Supervisors Salary
?1,30,000 p.a.
Estimated working hours 2,400p.a.
N~n-oroductive settinn up time ol the machine 20% ol estimated workina hours
The machine occ upIed ¼th of the t01 1
( 3) Calculate the Machine Hour Rate ; .:et The supervisor is expected to devote 115th of his time for the machine. (8)
2 10 e a11 ic" machine installed in a lactorv from the lollowinc particulars:
Per Annum Per Hour
Particulars
(ti
Monthly Supervisors Salary 9,000 -
Repairs and Maintenance 180 -
Rent of factory 4,800 -
Insurance Premium 300 -
Running Hours p.a. 3000 Hours -
Electric Power Consumed - 30 units
Water 300 -
Steam 450
Other information of Machine "Metallic"
Time devoted by supervisor 1110th
Area occupied by machine 114th
Rate ol electricity (?) 0.20 per unit
Original Cost ol Machine (t) 70,000
Carriage inwards on Machine (t) 10,000
Scrap value ol Machine (t) 20,000
Lile ol Machine 20 years
(24) From the following 1nformat1on you are required to work out the earnings ol worker A under: (7)
(I) Halsey premium scheme (Bonus 50% of savings).
(II) Rowan premium scheme.
Job Time allowed Time taken
X 26 hours 20 hours
y 30 hours 20 hours
His normal basic rate of wages was t 80 per day ol 8 hours and his dearness allowances was t240 per week of 48 hours.
October - 2019
(10)
(25) From the following information calculate Mac hine hour Rate or the machine.
Particulars Rs.
4,50,000
Purchases price of the Machine
50,000
Installation Charges
30,000
Rent- Per Quarter
2,000
General Lighting for total area- Per Month
6,000
Insurance Premium for the machine per Year
60,000
Foreman's salary per annum
Estimated Repairs lo Machine per annum
I 18,000
Power: 2 Units per hour @ Rs . 500 per 1000 units.
Estimated life of Machine 10 years.
Estimated Scrap Value at the end of 10th year Rs . 1,00,000.
 labour Costing Cost Accouobng (<>---
70 """' · V1

Machine is expected to run for 20,000 hours during its life time. -
(26) Machine occupies 25% of the total area and foreman devoted 116th of his time for the rnachin~soo1c of the time saved) and Ro,,
From the following information calculate the earnings of worker under Halsey premium plan o (;~
plan Separately. l
Time taken to complete job hours
60
Time allowed to complete job hours
100
Per Hour rate of wages R
30
Dearness Allowance Rs. 10 per day of hours :orked.
Working hours per day 8 hours
(27) rd
Mr. Ama eep of Amla Co. Ltd. Qets the followinq emoluments and benefits: (10)
Salary per month Rs. 6,250
Dearness allowance per month Rs. 13,t 25
Employer's contribution lo provident fund 8% of Salary and Dearness AUowanCe
Employer's contribution to E.S.I 4% of Salary and Dearness Allowance
Bonus 20% of Salary and Dearness Allowance
Other Allowance Rs. 68,t 00
Amardeep works for 2200 hours per annum. But out of which 200 hours are non-productive.
You are ~equested to find out the effective hourly cost of Amardeep.

(,)
I Additional Problems from Other University Exams
A
worker produced 200 units in a weeks' time, the guaranteed weekly wages payment for 45 hours ·n 1• Rs • 405 •• The expected
hour of time
that
to produce one unit is 15 minutes which is raised further by 20% under incentive scheme. What will be earning per ( )
worker under Halsey (50% sharing) and Rowan Bonus scheme? ed r 7
(2) A worker produced 200 units in week's time. The guaranteed weekly wages payment for 45 hours is Rs. 81 . The expect hime to
produce one unit is 15 minutes which is raised further by 20% under the incentive scheme. What will be the earning per our of
that worker under Halsey (50% sharing) and Rawn Bonus Schemes? . . . f h ~7)
(3) A worker takes 6 hours to complete a job under a scheme of payment of results. The standard time allowed for the Job '.s O ou s.

~- m
His wage rate is Rs. 1.50/- per hour. Material cost of the job is Rs. 16 of the overheads are recovered at 150% of the total direct

Calculate the factory cost under: (1) Rowan Plan (2) Halsey System of Incentives. .
(4) A worker produced 400 units in weeks' time the guaranteed weekly wages payment for 90 hours is Rs. 162. The expected time to
produce one unit is 30 minutes which is raised further by 20% under the incentive scheme. What will be the earning per hour of
that worker under Halsey's (50% sharing) and Rowan Bonus Schemes? (7)
(5) From the following, calculate total earnings of a worker under Halsey Plan and Rowan Plan: (7)
Weekly wages Rs. 1,440; Weekly hours Rs. 48; Cost of living bonus per hour Rs . 10.
Time allowed to complete the task (in hours) 80; Time taken to complete the task (in hours) 70.
(6) From the following particulars, you are required to workout the earnings of worker for a week under Halsey Premium Scheme
(50% sharing). Rowan Premium Scheme and piece rate: . - - - - - - - - - - - , - - - , - ,- :-, (7)
Weekly working time (hours) 48 Normal time taken per piece (minutes) 20
Wages rate per hour Rs. 15 Weekly normal output (piece) 144
Piece rate per unit Rs. 5 Actual output of a week (in units) 192
(7) From the following. calculale total earninqs of a worker under Halsey plan and Rowan Plan : (7)
Cost of living bonus per hour 40
nme allowed to complete task (in hours) t 60
Time taken to complete the task (in hours) 140
Weekly wages Rs. 2,880
Weekly hours 48
(8):;; Calculate the Earnings of a worker using Halsey and Rowan Plan Based on the following Information: (])
nme Allowed lo Complete the Job 160 hours Time Taken to complete the Job 140 Hours
Rale of Wages Per hour Rs. 25 Dearness Allowance is Rs. 90 per day of 9 hours