CMA Intermediate · Cost Accounting · Employee Costs
Under the Rowan plan, a worker with a time rate of Rs 50 per hour completes a job in 6 hours against an allowed time of 8 hours. What are the total earnings for the job?
Earnings are Rs 375. Time wages are 6 hours at Rs 50, or Rs 300. The Rowan bonus is time saved over time allowed (2/8) multiplied by wages for time taken, Rs 300, giving Rs 75. Total is Rs 375.
- ARs 375Correct
- BRs 300
- CRs 400
- DRs 325
Explanation
Time wages = 6 x 50 = Rs 300. Bonus = (time saved / time allowed) x time taken x rate = (2/8) x 6 x 50 = Rs 75. Total = Rs 375. Rs 300 omits bonus; Rs 400 pays the whole allowed time; Rs 325 uses 50% of saved time under the Halsey method (Rs 50).
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