SRINIVASA ACADEMY
(An Academy of Professionals for CA / ICWA / CS)
Contact no: 7299953258 / 7299963258 / 7299973258 / 7299993258
LABOUR
1) Time rate system = Standard hours * Rate per hour (Basicwages)
2) Piece rate system:
i) Straight piece rate earnings = Number of units produced * Rate perunit
ii) Differential Piecerate
a) F.W.Taylor’s differential rate system
» 83% of piece rate when below standard
» 125% of piece rate when above or at standard
b) Merrick differential or multiple piece ratesystem
Efficiency level
Piece rate
» upto 83%
»Normal piece rate
» 83%to 100%
» 110% of Normal rate
»Above100%
» 120% of Normal rate
iii) Gantt Task and Bonus system
Output
Payment
»Below standard
» Hours worked x rate p.h
»At standard
» 120% (Hours worked x rate p.h)
»Above standard
» 120% (Actual output x rate p.u)
iv) Emerson’s
Efficiency
Efficiency
system
Payment
»Below66.7%
» HourlyRate
»from 66.7%
» Hourly rate (+) increasing bonus according to degree to
100%
»Above100%
of efficiency on the basis of step bonusrates
» Hourly rate (+) 20% Bonus (+) additional bonus of1%
of hourly rate for every 1% increase in efficiency
v) Halsey Premium Plan = Hours worked x Rate p.h + 50% of time saved * Rate p.h
SRINIVASA ACADEMY
(An Academy of Professionals for CA / ICWA / CS)
Contact no: 7299953258 / 7299963258 / 7299973258 / 7299993258
vi) Halsey Weir Premium Plan = Hours worked x rate p.h + 30% of time saved * Rate p.h
vii) Rowan Plan = Hours worked x rate p.h +Time saved * Hours worked * Rate p.h
Time allowed
ix) Barth’s System = Hourly rate * √Std time *Time taken
Labour Turnover:1) Separation rate method = No. of Separations during the period
Average No. of workers during the period
2) Replacement method= Number of replacements during the period
Average No. of workers during the period
3) Additions Method =
No. of Additions during the period
Average No. of workers during the period
4) Labour flux rate =
No. of separation + No. of replacement
Average No. of workers during the period
PROBLEMS
1.Calculate the total earnings and effective rate of earnings per hour of three operators
under Rowan System and Halsey system from the following particulars
The standard time fixed for producing 1 dozen articles is 50 hours. The rate of wages is
Rs.1/- per hour
The actual time taken by three are as follows:
A. 45 HOURS
B. 40 HOURS
C. 30 HOURS
2. A workman takes 9 hours to complete a job on daily wages and 6 hours on a scheme of
payment by results. His hourly rate is 25p. The Material cost of the product is Rs.4 and
SRINIVASA ACADEMY
(An Academy of Professionals for CA / ICWA / CS)
Contact no: 7299953258 / 7299963258 / 7299973258 / 7299993258
factory overheads are recovered of 150% of the total direct wages. Calculate the factory
cost of the product under following methods:
a. Time rate system’
b. Halsey plan
c. Rowan Plan
3. In a factory guaranteed wages at the rate of Rs.1.80 per hour are paid in a 48 hour
week. By time and motion study is estimated that to manufacture one unit of a
particular product 20 minutes are taken the time allowed is increased by 25% . During
the week a produced 180 units of the product. Calculate his wages under the following
methods:
a. Time rate
b. Piece rate with guaranteed weekly wage
c. Halsey premium Bonus
d. Rowan premium Bonus
4. Calculate the earnings of workers A and B under straight Piece Rate system and Taylor’s
Differential Piece Rate system from the following particulars:
Normal rate per hour Rs.1.80
Standard time per unit 20 seconds
Differentials to be applies are:
80% of the piece rate below the standard;
120% of the piece rate at or above standard
A produced 1300 units per day of 8 hours & 1500 units per day of 8 hours
5. The following particulars apply to a particular job:
Standard production per hour 6 units
Normal rate per hour Rs.1.20
Mohan produced 32 units
Ram produces 42 units
Prasad produces 50 units
Calculate the wages of these workers under Merrick Differential Piece Rate System
6. In a manufacturing concern the daily wage rage is Rs.2.50. The standard output in a 6
SRINIVASA ACADEMY
(An Academy of Professionals for CA / ICWA / CS)
Contact no: 7299953258 / 7299963258 / 7299973258 / 7299993258
day week is 200 units representing 100% efficiency. The daily wage rate is paid without
bonus to those workers who show upto 66 2/3% of the efficiency standard. Beyond this
there is a bonus payable on a graded scale as below:
82% efficiency 5% bonus
90% efficiency 9% bonus
100% efficiency 20%
Further increase of 1% for every 1% further rise in efficiency. In a 6 day week A
produced 180 units; B 164 units; C 200 units: D 208 units and E 130 units
Calculate the earnings of these workers
7. A work measurement study was carried out in a firm for 10 hours and the following
information was generated
Units produced : 350
Idle time : 15%
Performance rating : 120%
Allowance time : 10% of standard time
What is the standard time for task?
8. Two fitters, a labourer and a boy undertake a job on piece rate basis for Rs.1,290. The
time spent by each of them is 220 ordinary working hours. The rates of pay on time rate
basis, are Rs.1.50 per hour for each of the two fitters, Rs.1 per hour for the labourer and
Rs.0.50 per hour for a boy.
The amount of piece-work premium and the share of each worker, when the piece –
work premium is divided proportionately to the wages paid
Compute the selling price of the above job on the basis of the following additional date:
Cost of the direct material Rs.2.010; works overhead at 20% of prime cost; selling
overhead at 10% of works cost and profit at 25% on cost of sales.
9. Using Taylor’s differential piece rate system, compute the earnings of the Amar, Akbar
and Ali from the following particulars:
Standard time per piece 20 minutes
Normal rate per hour (in an 8 hour-day) Rs.90
Amar produced 23 units
SRINIVASA ACADEMY
(An Academy of Professionals for CA / ICWA / CS)
Contact no: 7299953258 / 7299963258 / 7299973258 / 7299993258
Akbar produced 24 units
Ali produced 30 units
10. Refer Before sum 9 and compute the earnings of workers under Merrick’s Differential
Piece Rate-System
11. From the following information you are required to calculate the bonus and earnings
under Emerson Efficiency System. The relevant information is as under:
Standard working hours 8 hours a day
Standard output per hour in units 5
Daily wage rate Rs.500
Actual output in units
Worker A 25 units
Worker B 40 units
Worker C 45 units