Labour Cost Accounting
Labour Cost Accounting
Labour Cost Accounting
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<strong>Labour</strong> <strong>Cost</strong> <strong>Accounting</strong> 39/<br />
Illustration: 3<br />
From the following particulars, calculate total earnings of each worker under Gantt's Task and Bonus<br />
Scheme:<br />
Solution:<br />
Standard production per week per worker is 2000 units, piece work rate Rs. 5 per unit<br />
Actual production during the month :<br />
A-WOO units<br />
B - 2000 units<br />
C - 2500 units<br />
Standard production per month = 2000 units<br />
Piece work rate = Re. 0.50 per unit<br />
. '. Guaranteed Time Rate =<br />
Level of Efficiency:<br />
Standard output per month = 2000 units<br />
2000<br />
0.50<br />
= Rs. 4000 per month<br />
(100% efficiency)<br />
A's actual production = 1000 units<br />
1000<br />
A's level of efficiency = --- x 100 = 50 %<br />
2000<br />
B's actual production = 2000 units<br />
2000<br />
B's level of efficieQcy = x 100 = 100 %<br />
2000<br />
Earnings:<br />
C's actual production<br />
= 2500 units<br />
2500<br />
A's level of efficiency = x 100 = 125 %<br />
2000<br />
Under Gantt's Task and Bonus Plan wages are computed as follows:<br />
Output<br />
Below Standard<br />
At Standard<br />
Above Standard<br />
The earnings of the worker will be as follows :<br />
A (50% below the standard)<br />
B (100% efficiency)<br />
C (125% efficiency above standard)<br />
=<br />
=<br />
Rate<br />
Guaranteed Time Wages<br />
Given piece wages plus bonus of 20%<br />
High piece rate on worker's whole output.<br />
Rs. 4000 (Guaranteed monthly wages)<br />
2000 units x Re. 0.50 per unit + Bonus of 20%<br />
Rs. 1000 + 20% of Rs. 1000<br />
=<br />
= Rs. 1000 + 200 = Rs. 1200<br />
= . 2500 units x Re. 0.50 + Bonus of 20%<br />
Rs. 1250 + 20% of Rs. 1250<br />
= Rs.1500
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