MISCELLANEOUS ILLUSTRATIONS

at 25
ILLUSTRATION 9. The standard time taken to complete a product is 12 hours
paise per hour.
time allowed. But workers who
Time wages are allowed to workers taking more than thepiece work rate plus 10% bonus
complete the job in standard time or less receive a straight
i.e., 12 hoursat 0275. 15, 12, 10 and 8
Calculate the wages earned by A, B, C and D who complete the job in
hours respectively. What will be their effective hourly rate ? what will be the cost of
If the overhead rate chargeable to production is 0-50 per hour,
conversion (labour and overheads) per piece produced by each worker ?
SOLUTION
B C D
A
15 12 10
Time taken in hours
Wages due
For 15 hrs. @0-25 per hr. 3-75
3-30 3-30 3-30
For 12 hrs. @0-275 per hr. 3-30
3-75 3:30 3:30 =0:33 =0:413
Efective rate per hour = 0-25 = 0-275 10 8
15 12
3-75 3-30 330 330
Cost of labour
7-50 6-00 5-00 4-00
Overhead @50 P. per hr.
11-25 9-30 8-30 7-30
Cost of conversion

Scanned with CamScanner

 of pay is dearness
ILLUSTRATION 10. A
of
basic rate
workman whose In addition, he gets
premium bonus. doesthefollowingjobs:
under the "Rowan" system During one weok ne
al owance
720 per week of 48 hours. allowod, he takes 20 hourS.
101 for which 25 hours are allowed, he takes 24 hours.
() Job
which 30 hours are the worker's earnings and the
102 for Find
() Job
waiting time amountsto 4 hours.
Duringthe week, his each job and to overhead.
amounts to be charged to
sOLUTION 101
Worker's Eamings Irom Job
= 25 hours
Sor Standard Time =20 hours
Tor Actual Time = 1 per hour 20.00
Ror Rate
hrs. @1 per hour
Wages for actual time = 20 system
Premium according to Rowan 4.00
25-20 x20x 1
xTxR=
=S 25
25 9.09
Proportion of Dearness Allowance =20 xEE=
55
ratio of time allowed
(Divide between two jobs in the
forthejobs i.e., 25: 30) 33.09
Earnings from Job 101
102
The Worker's Earnings from Job
S= 30hours
T=24 hours
R=1per hour" = 24.00
hour
Wages for actualtime = 24 hours @1 per
Premium according to Rowan system
-x TxR = 30-2424x1 = 4.80
30
10.91
Proportion of Dearness Allowance =20 xEE
= 39.71
Earnings from Job 102
hrs. @1=74
Waiting time to be charged to overhead:4
time is assumed as normal idle time).
(Worker is to get wages for idle time and idle of the Worker
Total Earnings
Job 101 33.09
=7 39.71
Job 102
Overhead 4.00
= 76.80
ILLUSTRATION 11. For a certain work order, the standard time is 20 hours, wages
of
75 per hour, the actual time taken is 13 hours and factory overhead charges are 80%
standard time.
Set out a cormparative statement showing the effect of paying wages according to () The
Halsey Bonus System and () The Rowan Incentive Bonus System.
SOLUTION
Normal wages for actual time taken 13 hours @5 =765.00
Bonus under the Halsey Premiun Scheme
50
50% (S -T) x A= 0g (2013) x*5 =17.50
Scanned with CamScanner
 Bonus under the Rowan
Promium
S-T xTNR 20 13 Schomo
S 20 x13x 5 22.75
Total wages including bonus
Halsey Scheme payable under tho
65 4 17.50 82.50
Total wages including bonus
Premium Scheme payablo uncler tho Rowan
65+22.75 87.75

Employer's Saving under the Halsoy Plan

Saving in Labour Cost :
Standard wages (20 hours @5)
Less: Actual wages payable 100.00
82.50

Saving in Overhead: 17.50

80% of wages for the time saved 80

=n (7 hrs. @?5) 28.00

Total Savings 45.50

Saving in Labour Cost Employer's Saving under the Rowan Plan

S'andard wages(20 hrs. @5) 100.00
Less: Actual wages payable under the Rowan Plan 87.75
12.25
Saving in Overhead
80% of wages for the time saved (7 hrs. @ 5) 28.00
Total Savings 40.25

Comparative Statement Showing the Effect of Paying Wages under

the Halsey Plan and the Rowan Plan
Incentive Normal Bonus Total Employer's Effective Rate of
System Wages Wages Savings Earning per hour

82.50 Total
Halsey 65.00 17.50 82.50 45.50 6.35 13 Wages

22.75 87.75 87.75 \Actual

Rowan 65.00 40.25 6.75
13 Time

ILLUSTRATION 12. The starndard hours of Job X is 100 hours. The job has been
completed by Amar in 60 hours, Akbar in 70 hours and Anthony in 95 hours. The bonus
system applicable to the job is as follows :
Percentage of time saved
totime allowed Saving upto 10% From 11% to 20% From 21% to 40% From 41% to 100%
Bonus 10% of time saved 15% of time saved 20% of time saved 25% of time saved
The rate of pay is 1per hour
Required: Calculate the total earnings of each worker and also the rate of earnings per
hour.
Scanned with CamScanner
SOLUTION
CALCULATION OF EARNINGS OF WORKERS Workers Anthony
Time allowed for Job X Amar Akbar 100 hours
Time taken 100 hours 100 hours 95 hours
Time saved 60 hours 70 hours 5 hours
%of tinme saved 40 hours 30 hours 50%
40% 30%
40
100X
30 X100
100 To0 100
Bonus 10% of time
20% of time 20% of time saved
saved saved
Bonus hours hour
8 hours 6 hours
(20% of 40 hrs.) (20% of 30 hrs.) (10% of 5 hrs.)
Total Wages (Time taken + Bonus hrs.) 68 hours 953 hours
76 hours
(60 + 8) (70 + 6) 95 +5
Total Wages @1per hour 68 776 795.50
Rate of Earning per hour 71.133 71.086 71.005
Total Wages 68 76 95
Time Taken 60 70 90

Scanned with CamScanner

 PRACTICAL PROBLEMS
1. The output of worker A is 64 units in a40 hours week. Guaranteed time rate is 5 per hour.
Ordinary piece rate is 2 per unit. Show the earnings of worker A under piece rate and time
rate systems.
Ans. [Piece Wages 128; Time Wages 200]
hours for which wages
The Standard output of a product has been fixed at 6 units in a day ofthe8 output
2. is 5 units and 8
plan when
are 12. Find total wages as per piece rate and Halsey
units.
16; wages as per Halsey Plan : For 5
Ans. [Piece Wages for 5units 10 and for 8 units
units 12 and for 8units 14].

Scanned with CamScanner

 under:
Information as Rowan Plan.
following and(d)
3. HalsoyPlan,
Calculate the
(a) Time Rateeanings (b) Pioce
of a workor from tho
Rate Mothod, (c)Tlmotaken 20
hours. paise per hour
Method, hours; allowance @50
30 doarnoss
Information given :Standard Time hour plus a
Hourly rate of wages is 1por
worked. (b) Halsey Wei,
Ans. [(a) 30;() 40 ;(c) *35; and () 36.67] Premium Bonus System
4. Galculate the earnings of a workor under (a) Rowan followingparticulars:
worker) fromthe
Premium Bonus System (40 por cont to
Hourly rate of wages (guaranteed) ? 0.75.
Standard time for producing 1dozen articles is 3 hours.articles in 48 hours.
Actual time taken i by the worker to produce 20 dozen
Ans. [(a) 43.20 ; (b) T39.60] ?1 per
16 hours and the basic wage hours
5. In an engineering works, the standard time for ajobis rate for
workeris to receive his normal
that 20 and
hour. Abonus scheme is instituted so
time saved. Materials for the job cost
actually worked and 50% bonus for the
overheads are charged on a basis of 2 per labour hour.
the job is completed () in 12 hours
beeulate the wages and effective rate of earning per hour if
and (i) in 14 hours.
Also ascertain factory cost of the job on the same basis.
Ans. [() 58; 1.167 ; (i) 63; 1.071]
6. Calculate the amount of wages and bonus earned by the worker :
Name: J. Jain Clock No. 214
Commenced job Saturday, 23rd June, 8a.m.
Finished job Wednesday, 4th July, 5 p.m.
Number of pieces of work given out 808
Number of pieces ofwork passed 718
Worker's rate 72per hour
Time allowed 10per hour
Bonus 50% of time saved.
Pay week commences at 8 a.m. on Wednesday.
hours a day and no overtime: Saturday, 4 hours. Assume that the employee worked on 8
Ans. [WNages 144; Bonus = Nil]
7. Calculate the earnings of workers Aand B
under Straight piece rate system and Taylor's
Differential Piece Rate System from the following
Normal Rate per hour particulars:
? 2.40
Standard time per unit 30 seconds
Differentials to be applied.
80% of piece rate below standard. 120% of
Worker Aproduces 800 units per day and Worker piece rate at or above standard.
Ans. [A-16 and 12.80; B- 20 and 24] Bproduces 1,000 units per day.
8 What will be the
earnings of a
volume of work for which the worker at 55
standard timepaise per hour when he takes 140
allowed is 200 hours. The plan ofhours to do a
bonus on a sliding scale is as under :
(a) Within the first 10%
saving in standard time, the
payment of
(b) Within the second 10% saving in bonus is 40% of the
(c) Within the third 10% saving in standard t imme, the bonus is 50% of time saved
() Within the fourth 10% saving in standard time, the bonus is 60% of the time saved.
(e) For the rest the bonus is 75% of standard time, the bonus is the time saved.
Ans. [ 93.50] the time saved. 70% of the time saved.
9. Aworker takes 9 hours to
by result. His daily rate iscompiete a job on daily wages and 6 hours on a
overheads are recovered at75 paiseof an hour: the
scheme of
material cost of the product
wages. Calculate the is4payment
150% the total
product under:
(a) Piece Work Plan ;(b)
direct and the
Ans. (a) 15.25; (b) ?19.00; (c) 18.07] Rowan Plan;(c) Halsey Plan. factory cost of the

Scanned with Cam Scanner

 10. Using the following data, discuss and lustato the Halsoy and the Rowan Promium Bonus
systems bringing out their comparativo morits and dernerits:
Time allowed 48 hours
Time taken 40 hours
Rate per hour
46.67)
Ans. ( 44;
paythoir workors under tho
11. Production sections of a factory working on a1job ordor system allowanco of ? 24
Rowan Premium Bonus Scheme, Workers are also ontitled to a doarness timo sheot for a
his
per week of 48 hours, worker's basic wngo is 4 per day of 8 hours and
week is summarised below:
Job No. Time allowed Timo takon
1 25 hours 20hours
30hours 20 hours
Idle time (waiting) 8 hours
each job and to overhead.
Find the Worker's eamings and the amounts to be chargod to
"Ans. Job No. 1 = 22.91;Job No. 2 = 26.42 :Overhead =4,00]
apportioned between two jobs in the
The above answer is valid if the amount paid as D.A. is
ratio of time allowed.
Job No. 1, Job No. 2 and idle time, the
Ifthe amount paid as D.A. is apportioned among
answer will be
Job No.1;22; Job No. 2=23.33; overhead=8]. articles. He
During first week of April 2014 the workmen Mr. Kalyan manufactured 300estimated time
12. (a) weekat the rate of 4 per hour. The
receives wages for a guaranteed 48 hour allowed is increased
and under incentive scheme the time
to produce one article is 10 minutes
by 20%. Calculate his gross wages according to:
() Piece-work with a guaranteed weekly wage.
(1) Rowan premium bonus,and
(II) Halsey premium bonus 50% to workman.
Ans. [) 7240; (|1) 230.40;(11) 216] B under Straight
basis of the following information, calculate the earnings of A and
13. On the Piece-rate system:
Piece-rate System and Taylor's Differential
Standard production-8 units per hour.
Normal time rate0.40 per hour
Differentials to be applied:
standard.
80% of piece-rate below standard.
120% piece-rate at or above
54 units and Bproduces 75 units.
In a nine-hour day Aproduces
3.75;4.50]
Ans. [A2.70, 7 2.16; B total monthly remuneration of three
workers A, B and C.
calculate the
14. From the following data,
Standard production per month per worker is 1,000 units.
()
a month:
() Actual production duringunits,
A-850 units, B-720 C-960 units
actual production-20 paise
(i) Piece work rate per month of
month (fixed)
(i) Dearness wages- 50 per20 per month (fixed)
() House rent allowance-*
(fixed)
(v) Time allowance-720 per month rate of 5 for each percentage of actual production
(vi) Additional production bonus at the
exceeding 80 per cent of the standard.
Ans. [A--7 285: B- 234; C-7 362]
earnings for the week of a worker under :
15. From the followingparticulars work out the
; (c) Halsey Premium System : (d) HOwan
Rate
(a) Straight Piece Rate ;(b) Differential Piece
System.
Scanned with CamScanner
 Number of working hours pnt Weok 48: Wagos por hour 3.75 Hato por pioco
Normal time per pieco 20 minutes Normal output por wook 120 piocos ; Actual output
week 150 pieces.
Differential Piece Rate : 80% pleco rate whon output is bolow
standard and 120%
whon abo
standard.
Ans. (a) 225: (b) T270:(c)
16. Aworker 183.75; ( 107.20) of 12 por woek of 4
under the
hours plus a cost of Halsey
living bonus of romuneration
metthodof 10 hag a dayHoratos givon
P. por hour workod. an 8 hour
pertom, which he 30% of tho time savod as
bonus. What wouldaccomplishes in 6 hours.
be his total hourly rate of Ho is allowod
eanings and what difforonco wouldit make premiur,
was paid under the Rowan
Ans. [Hourly rate of earnings method.
0.375 ;Difference 0.225]
17. Find the remuneration of Mr.
Karthik, a worker, on the basis of() Timo Aato () Piece Rato.
() Halsey Plan, and (i) Rowan Plan from the following information :
() Name of the worker: Karthik. () Ticket No. 60.
() Work started:1-4-2014 at 8a.m. (i) Work finished: 5-4-2014 at 12 noon
(y Work alloted: Production of 1,080 units, (v) Work done andapproved:1,000 units.
() Time and units allowed 20 units per hour. (vi) Wage rate : 1.60 per hour.
(ix) Bonus :40% of time saved. (x) Worker Karthik worked for 9 hours a day
Ans. (0T 64:(in 80; (üin 70.40; (i) 776.80].
18. With the help of the following information, your are required to ascertain the wages paid to
workers Xand Yunder the Taylor's systern.
Standard time allowed.... 10 units per hour
Normal wage rate .... 71 per hour
Differential rates to be applied :
75% of piece rate when below standard
125% of piece rate when at or above standard
Theworkers have produced in aday of 8 hours as follows :
X-60 units, Y-100 units.
Ans. Worker X's wages =4.50; Worker Y's wages = 12.50].
19. An operator engaged in machining certain components receives an ordinary rate of ? 1.60 per
day of 8 hours. The standard output for machining the component has been fixed at 80 pieces
per hour (time as fixed for premium bonus). Orn a certain day, the output of the worker on this
machine is a00 pieces. Find the labour cost per 100 pieces and the wages that would have
been earned by the workman under the following:
(a) lfa bonus of 0.23 is paid per 100 of the extra output. (b) If paid for on straight piece-work
basis at the standard rate. () lf Halsey premium bonus system is being adopted (50 - 50).
Ans. [(a) 1.97 ; (b) 72.00; (c) 1.80]
20. The extract from the payroll of a company gives the following information :
Number of employees at the beginning of 2014 240
Number of employees at the end of 2014 310
Nunber of employee discharged during the year 5

Number of employees resigned during the year 26

Number ofemployees replaced due to quits and discharges 25
Calculate the net annual labour turnover rate of the company and comment on it.
Ans. [9.1%]
21 Eiod out the earnings of the workers on tne basis OT MerricK'S differential piece rate sustem
from the following particulars:
Die rote # 1per unit : Production of workers X= 90 units Y = 100 units Z = 130 units:
Standard production = 120 units.
Ans. = 90; Y=110;Z = 156]
Scanned with CamScanner
22. Calculate the monthly remuneration of three workers XYand Z from the following data.
(a) Standard production per month per worker 1,000 units.
(b) Actual production during the month : X= 850 units: Y= 750 units; Z = 950 units.
(c) Piece work rate 2 per unit of actual production.
(o) Additional production bonus is 10 for each percentage of actual production excee ol ng
80% actual production over standard production.
(e) Dearness allowance is 100 per month fixed.
Ans. [X=1,850; Y=1,600; Z= 2,150]

Scanned with CamScanner