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CMA Foundation · Fundamentals of Business Economics and Management · Introduction to Management

Under Taylor's differential piece-rate system, the standard output is 100 units a day. The rate is ₹10 per unit for workers reaching or exceeding the standard, and ₹8 per unit for workers below it, applied to all units produced. Worker A produces 90 units and Worker B produces 110 units. What is the total wages of A and B together?

The total wages are ₹1,820. Worker A, below the standard of 100 units, earns 90 × ₹8 = ₹720. Worker B, above the standard, earns 110 × ₹10 = ₹1,100. Adding the two gives ₹1,820 under the differential piece-rate system.

  1. A₹1,800
  2. B₹1,820Correct
  3. C₹2,000
  4. D₹1,900

Explanation

A is below standard: 90 × 8 = ₹720. B meets the standard: 110 × 10 = ₹1,100. Total = 720 + 1,100 = ₹1,820. Using ₹10 for all 200 units gives ₹2,000, wrongly ignoring the lower rate for A. Using ₹9 for all would not reflect the differential rate.

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