Mr. A works in a manufacturing company where he is paid bonus according to the Halsey 50% plan, besides the normal wages. The relevant data is as…
CA Intermediate · Cost and Management Accounting · RTP · May 2025
Mr. A works in a manufacturing company where he is paid bonus according to the Halsey 50% plan, besides the normal wages. The relevant data is as below: Time Rate (per hour) 100 Time allowed 10 hours Time taken 5 hours Time saved 5 hours Mr. A believes that his bonus under Halsey system is getting reduced by 50%, thus intending to shift towards Rowan Premium Plan. You are required to CALCULATE the total earnings of Mr. A as per Halsey plan and Rowan Premium plan & ENUMERATE the reason for difference in both the earnings.
Suggested Answer and Working Notes:
Correct Answer: Option (C)
Total earnings as per Halsey plan-750 and as per Rowan Premium plan-750. When the actual time taken is 50% of the time allowed, the earnings under Halsey and Rowan Plans are equal.
Topics: Employee Cost & Direct Expenses
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