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

Under the Halsey premium plan with a 50% share to the worker, a worker is paid Rs 40 per hour. Standard time for a job is 50 hours and he finishes it in 40 hours. What is his total earning for the job?

The worker earns Rs 1,800. Time wages are 40 hours at Rs 40, which is Rs 1,600. He saves 10 hours, and under Halsey 50% of the saving at Rs 40 gives a bonus of Rs 200. Adding the two gives Rs 1,800.

  1. ARs 1,600
  2. BRs 1,800Correct
  3. CRs 2,000
  4. DRs 1,700

Explanation

Time wages = 40 x 40 = Rs 1,600. Time saved = 10 hours; bonus = 50% x 10 x 40 = Rs 200. Total = Rs 1,800. Rs 2,000 would pay the whole standard time (50 x 40), which is the Rowan-unrelated time-rate on standard hours, not Halsey.

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