Important Techniques of Labour Costing

In this article, we are trying to explain some important techniques and formulas to calculate labour cost, payroll and incentive wages. 1. Measurement of Labour Turnover (a). Separation Method Labour Turnover = (No. of separations in a period / Average No. of Workers) x 100 LT = (NS / ANW) x 100 (b). Replacement Method … Read more

Labor Costing | Practical Questions With Answers

Question 1 Consider the following information concerning the monthly remuneration of three workers: Standard production per month per worker 1,000 units Actual production during the month: A, 850 units; B, 750 units; and C, 950 units. Piece work rate is $0.10 per unit (actual production) Additional production bonus is $10 for each percentage of actual … Read more

Incentive Plans

Incentive Plans: Definition Incentive plans are used by companies to keep employees motivated. These plans rely on the power of incentives to affect employee behavior. When incentives are aligned through the use of incentive plans, this encourages employees to perform their tasks with more effort and efficiency. Advantages of Incentive Plans In the context of … Read more

Methods of Time-Keeping

There are two main time-keeping methods: Manual methods, which include attendance register or muster roll and the checks, token, or disc method Mechanical methods, which are divided into the time clock method (either the dial recorder system or the key recorder system) 1. Manual Methods of Time-Keeping (a) Attendance Register or Muster Roll Under this … Read more

Difference Between Direct and Indirect Labor Cost

Direct Labor Direct labor refers to that labor which can conveniently been identified or attributed wholly to a particular job, product or process. It is employed directly on the production work. Direct labor is that labor which is used in converting raw material into finished goods. It helps in altering the construction, Composition or condition … Read more