CA Intermediate · Cost and Management Accounting · Employee Cost and Direct Expenses
Sharma Tools pays a worker under the Halsey premium plan. Standard time for a job is 40 hours, time taken is 30 hours, the wage rate is Rs. 50 per hour, and the worker gets 50% of the time saved as bonus. What is the total earning for the job?
Total earning is Rs. 1,750. The worker is paid for 30 hours taken at Rs. 50, which is Rs. 1,500, plus a bonus of 50% of the 10 hours saved at Rs. 50, which is Rs. 250. Together this gives Rs. 1,750 under the Halsey plan.
- ARs. 1,750Correct
- BRs. 1,500
- CRs. 2,000
- DRs. 1,875
Explanation
Time saved = 40 - 30 = 10 hours. Earnings = 30 x 50 = 1,500 plus bonus 50% x 10 x 50 = 250, giving 1,750. Rs. 1,500 omits the bonus; Rs. 2,000 pays the full wages on standard time (the Taylor-style day-rate on standard hours).
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
- Sharma Fabricators pays a worker under the Rowan plan. Standard time for a job is 20 hours, the hourly rate is Rs 80, and the worker finishe…
- 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 treated as a direct expense of a job rather than as overhead?
- Rohini Textiles had the following for the month: 40 workers, each normally working 200 hours, with a time rate of Rs 90 per hour. Actual idl…
- A factory worker at Kalyani Engineering is paid a basic wage of Rs 600 per day plus dearness allowance. The company's cost accountant is cla…
- Kaveri Textiles pays a worker on the Rowan plan. Time rate is Rs 30 per hour, standard time is 60 hours, and actual time taken is 45 hours. …