CMA Intermediate · Cost Accounting · Employee Costs
A factory worker of Sundaram Engineering earns basic wages of ₹30,000 and dearness allowance of ₹10,000 per month. The employer contributes provident fund at 12% of basic plus DA, and pays ₹2,000 per month as an employer-borne medical benefit. What is the monthly employee cost for this worker?
Monthly employee cost is ₹46,800: basic and dearness allowance of ₹40,000, employer PF of ₹4,800 at 12 percent, and medical benefit of ₹2,000. All three are costs of employing the worker and must be added together.
- A₹46,800Correct
- B₹44,800
- C₹42,000
- D₹40,000
Explanation
Basic plus DA = 40,000. Employer PF = 12% of 40,000 = 4,800. Employee cost = 40,000 + 4,800 + 2,000 = 46,800. Option 44,800 omits the medical benefit, and ₹42,000 omits PF and includes only medical.
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