Assuming a man-day of 8 hours, you are required to CALCULATE the labour cost per man-day. The following data has been provided. (i) Basic Salary 80…

CA Intermediate · Cost and Management Accounting · MTP · January 2026
Assuming a man-day of 8 hours, you are required to CALCULATE the labour cost per man-day. The following data has been provided. (i) Basic Salary 80 per day (ii) Dearness Allowance 80 paise per every point over 100 cost of living index for working class. Current cost of living index is 785 points. (iii) Leave Salary 10% of (i) and (ii) (iv) Employer's contribution to Provident Fund 10% of (i), (ii) and (iii) (v) Employer's contribution to State Insurance 2.5% of (i), (ii) and (iii) (vi) Expenditure on amenities to labour 30 per head per month (vii) Number of working days in a month 25 days of 8 hours each

Suggested Answer and Working Notes:

(a) Statement of Labour Cost (per man-day of 8 hours) Particulars (₹) (a) Basic Salary 80.00 (b) Dearness Allowance @ 80 paise per every point over 100 cost of living index for a month of 25 days (785-100)x0.80 / 25 = 21.92 101.92 (c) Leave Salary – 10% of (a) and (b) 101.92×10 / 100 = 10.19 112.11 (d) Employer's contribution to Provident Fund 10% of (a), (b) and (c) 112.11 ×10 / 100 = 11.21 (e) Employer's contribution to State Insurance 2.5% of (a), (b) and (c) 112.11 x 2.5 / 100 = 2.80 (f) Amenities to labour @30 per head per month of 25 working days 30 / 25 days = 1.20 Total 127.32

Topics: Employee Cost & Direct Expenses

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