Labour Costing Practical Questions with Answers
Question No. 1
Calculate total monthly remuneration of three workers: A, B and C.
(a). Standard production per month per worker 1,000 units.
(b). Actual production during the month:
A: 850 units
B: 750 units
C: 950 units
(c). Piece work rate is 10 cents per unit (actual production)
(d). Additional production bonus is $10 for each percentage of actual production exceeding 80% actual production over standard.
(e). Dearness pay fixed $50 per month.
Total Monthly Remuneration of the Workers
Question No. 2
Production sections of a factory working on a job order system pay their workers under the Rown Premium Bonus Scheme. Workers are also entitled to a dearness allowance of $25 per week of 48 hours.
A worker’s basic wage is $4 per day of 8 hours and his timesheet for a week is summarised below:
|Job No.||Time Allowed||Time Taken|
|1||25 hours||20 hours|
|2||30 hours||20 hours|
Idle time (waiting) 8 hours.
Required: Calculate Gross Wages he has earned for the week.
|Job No. 1||Job No. 2|
|Time Allowed||25 hrs.||30 hrs.|
|Time Taken||20 hrs.||20 hrs.|
|Time Saved||05 hrs.||10 hrs.|
Bonus Hours (Rowan Plan)
|Job No. 1||$22.00|
|Job No. 2||23.33|
|Idle Time Wages (8 x .50)||4.00|
|Dearness Allowance for idle time (8 x .50)||4.00|
Question No. 3
An operator engaged in machining certain components receives an ordinary day rate of $160 per day of 8 hours. The standard output for machining the components has been fixed at $0.80 per hour (time fixed for premium bonus). On a certain day the output of the worker on this machine is 800. Find labour cost per 100 pieces and the wages that would have been actually earned by the workman under the following:
1: If a bonus of $19.00 is paid per 100 of extra output.
2: If paid for on straight piece work basis at the standard rate.
3: If Halsey Premium Bonus System is in use.
Req. No. 1:
|Standard output per hour||= 80 pieces|
|Standard output per day or for 8 hours||= 80 x 8||= 640 pieces|
|Actual output in 8 hours or in a day||= 800 pieces|
|Extra output||= 800 – 640||= 160 pieces|
|For 100 extra output Bonus is||= $19.00|
|For 1 extra output bonus is||= $19.100|
|For 160 extra output bonus is||= (19 / 100) x 160||= $30.40|
|Regular wages for 8 hours||= $160.00|
|+ Bonus||= $30.40|
|Total Wages||= $190.40|
Per 100 Piece Wages:
|For 800 pieces wages||= $190.40|
|For 1 piece wages||= $190.40/800|
|For 100 pieces wages||= (190.40 / 800) x 100 = $23.80|
Req. No. 2: Straight Piece of Rate
|Per piece wages||= 160 / 640||= $0.25|
|For 800 pieces wages||= 800 x 0.25||= $200|
|Per 100 pieces wages||= (200 / 800) x 100||= $25|
Req. No. 3: Halsey Premium Bonus System
Standard time for 640 pieces = 8 hrs.
Standard time for 1 piece = 8 / 640
Standard time for 800 pieces = (8 x 800) / 640 = 10 hrs.
Time Taken = 8hrs.
Time Saved or Bonus Hours = 10 – 8 = 2 hrs.
Formula for Halsey Premium Scheme
50% of time saved = 2 x (50 / 100) = 1 hour
Regular Wages = $160.00
Bonus = (1 x 160) / 8 = $20.00
Total Earnings = 160 + 20 = $180.00
Per 100 piece Earnings = (180 / 800) x 100 = $22.50
Question No. 4
The time and motion study department of Moonlight Corporation informs you that standard production on a certain item 40 units per hour. During the last week of December, a worker’s record shows the following for each 8 hours day:
You are required to prepare a schedule showing the workers daily earnings, the effective hourly rate and the labour cost per unit if the company used:
(a). The Halsey Premium Plan with a guaranteed rate of $1.00 per hour and a premium of 50% of the time saved on production in excess of standard.
(b). The Tailor’s Differential Piece Rate System with rates as follows. For standard production and above 4 cents per unit, and below standard production 3 cents per unit.
(c). A 100% Bonus Plan and the base wage is $1.50 per hour.