A skilled worker has assigned a work. The relevant data is given as follows: Time rate per hour - 25 Time allowed 9 hours Time taken 6 hours The…
CA Intermediate · Cost and Management Accounting · PYQS · January 2025
A skilled worker has assigned a work. The relevant data is given as follows: Time rate per hour - 25 Time allowed 9 hours Time taken 6 hours The worker has given an option to choose either Halsey (50% plan) or Rowan plan. You are required to calculate earnings under both plans and which plan is more beneficial for a worker. (5 Marks)
Suggested Answer and Working Notes:
Earning under Halsey Plan Total Wages = (Time taken × Time rate) + (50% of time saved × time rate) = (6 hrs x 25) + ((9 hrs - 6 hrs) x 50% x 25) = 150 +37.5 = 187.5 Earning under Rowan Plan Total Wages = (Time taken × Time Rate) + (Time saved / Time allowed × Time taken × Time Rate) = (6 hrs x 25) + ((9 hrs - 6 hrs) / 9 hrs x 6 hrs x 25) = 150 +50 = 200 Note: Rowan Plan is more beneficial for a worker since he is more earning under this plan i.e. 200-187.5 = 12.50
Topics: Employee Cost & Direct Expenses
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