Skip to content

CA Intermediate · Cost and Management Accounting · Employee Cost and Direct Expenses

A worker at Sharma Engineering is paid under the Halsey premium plan. The standard time for a job is 40 hours, the time rate is Rs 60 per hour, and the worker completes the job in 30 hours. The bonus is 50% of the time saved, paid at the time rate. What is the total earning of the worker for the job?

The worker earns Rs 2,100. Under Halsey, wages for 30 hours actually worked at Rs 60 equal Rs 1,800, and the bonus is half of the 10 hours saved at Rs 60, which is Rs 300. Adding the two gives Rs 2,100 as total earnings for the job.

  1. ARs 1,800
  2. BRs 2,100Correct
  3. CRs 2,400
  4. DRs 2,250

Explanation

Time saved = 40 - 30 = 10 hours. Earnings at time rate = 30 x 60 = Rs 1,800. Bonus = 50% x 10 x 60 = Rs 300. Total = Rs 2,100. Rs 2,400 wrongly pays the standard hours at the time rate with no bonus, as the Taylor-like guaranteed amount, and Rs 2,250 uses a bonus of 75%.

Did you get it right without looking?

One question tells you little. A timed set on Employee Cost and Direct Expenses shows your real accuracy, how long you take and where you lose marks.

Practise Employee Cost and Direct ExpensesFree diagnostic mock

More Employee Cost and Direct Expenses questions