The following particulars have been compiled in respect of three workers, which are under consideration of the management. I II III Actual hours…
CA Intermediate · Cost and Management Accounting · MTP · May 2024
The following particulars have been compiled in respect of three workers, which are under consideration of the management. I II III Actual hours worked 380 100 540 Hourly rate of wages (in ₹) 40 50 60 Productions in units: Product X 210 - 600 Product Y 360 - 1350 Product Z 460 250 - Standard time allowed per unit of each product is: Minutes X Y Z 15 20 30 For the purpose of piece rate, each minute is valued at 1/- You are required to calculate the wages of each worker under: (i) Guaranteed hourly rate basis (ii) Piece work earning basis, but guaranteed at 75% of basic pay (Guaranteed hourly rate if his earnings are less than 50% of basic pay.) (iii) Premium bonus basis where the worker received bonus based on Rowan scheme.
Suggested Answer and Working Notes:
(i) Computation of wages of each worker under guaranteed hourly rate basis Worker Actual hours worked (Hours) Hourly wage rate (₹) Wages (₹) I 380 40 15,200 II 100 50 5,000 III 540 60 32,400 (ii) Computation of Wages of each worker under piece work earning basis Product Piece rate per unit (₹)
Topics: Employee Cost & Direct Expenses
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