CA Intermediate · Cost and Management Accounting · Employee Cost and Direct Expenses
Ananya Textiles pays under the Halsey premium plan. Standard time for a job is 40 hours, actual time taken is 30 hours, and the hourly rate is Rs 60. The premium is 50% of time saved. What is the total wage earned for the job?
Under Halsey plan the worker gets wages for actual hours plus 50% of time saved at the hourly rate. Actual wages are 30 x 60 = Rs 1,800 and the bonus is 50% x 10 x 60 = Rs 300, so total wages are Rs 2,100.
- ARs 1,800
- BRs 2,100Correct
- CRs 2,400
- DRs 1,950
Explanation
Time saved = 40 - 30 = 10 hours. Basic wages = 30 x 60 = Rs 1,800. Bonus = 50% x 10 x 60 = Rs 300. Total = Rs 2,100. Rs 1,800 omits the bonus, and Rs 2,400 pays the full standard time (40 x 60), which is the Rowan/Taylor-type error of paying for time saved in full.
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