CA Intermediate · Cost and Management Accounting · Employee Cost and Direct Expenses
Sharma Textiles pays a worker under the Halsey premium plan. Standard time for a job is 40 hours, the time taken is 30 hours, the hourly rate is Rs. 50, and the bonus share is 50% of time saved. What is the total earnings for the job?
Total earnings are Rs. 1,750. Time wages for 30 hours at Rs. 50 are Rs. 1,500, and the Halsey bonus is 50% of the 10 hours saved at Rs. 50, which is Rs. 250. Adding the two gives Rs. 1,750.
- ARs. 1,500
- BRs. 1,750Correct
- CRs. 2,000
- DRs. 1,250
Explanation
Time saved = 40 - 30 = 10 hours. Time wages = 30 x 50 = Rs. 1,500. Bonus = 50% x 10 x 50 = Rs. 250. Total = Rs. 1,750. Rs. 2,000 results from paying for the standard time of 40 hours, which is time-rate with no bonus on the hours taken.
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.
More Employee Cost and Direct Expenses questions
- Ravi Auto Components pays Rs 20 per hour for a 40-hour week of 8 hours a day over 5 days. Overtime beyond 8 hours a day is paid at double ra…
- Which of the following is treated as an idle time cost arising from a normal cause in cost accounting for employees?
- Meenakshi Textiles pays a skilled worker Rs 120 per hour for a 48-hour week. Normal week is 40 hours. Overtime beyond 40 hours is paid at do…
- 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 ho…
- Mehta Plastics has an annual workforce of 400 workers at the start of the year; during the year 30 workers left, 20 were discharged, and 50 …
- Which one of the following is an example of 'idle time' in the context of employee cost?