Labour Cost Accounting

Labour Cost Accounting
Bonus Payable
Earning
At 100% efficiency = 20% of time wages
Further increase of 1 % in the bonus is given for every 1 % increase in the efficiency.
. '. For next 25% efficiency @ 1 % for
each 1 % increase in efficiency
Total Bonus payable = 45% of Time Wages.
}
Time Wages for 8 hours @ Rs. 2.50 per hour = Rs. 20.
45
Add: 45% bonus of time wages = -- x 20 = Rs. 9
100
Total Earning = Rs. 20 + Rs. 9 = Rs. 29
= 25% of Time Wages
(5) Barth Variable Sharing Plan: This scheme introduced to attract newly recruited and skilled
employees who are motivated to learn woi'k. It provides sufficient incentives to inefficient workers who are
motivated to increase productivity. Earning under this method is calculated by applying the following formula:
Earnings = Rate per hour x -Y Standard Time x Time Taken
Illustration: 10
Solution:
From the following particulars calculate earnings of a worker under Brath Variable sharing plan :
Standard Time
Time Taken
Rate per hour
= 12 hours
8 hours
= Rs.5
Calculation of earnings under Barth Variable sharing plan:
Earnings
= Rate per hour x -Y Standard Time x Time Taken
=5x~12x8
= Rs.48.98
(6) Bedaux Point Premium System: This plan was introduced by Charles E.Bedaux in 1911. Under
this plan, standard time fixed for each operation or job is expressed in terms of Bedaux point or'S.' For example,
a standard time of 360 B means the operation or job should be completed within 360 minutes. The chief
advantage of this plan is that it can be applied to any kind of a job. Under this system, worker is paid at the
time for actual hours worked, and 75% of the wages for the time saved are paid as bonus to the worker and
25% to the foremen, supervisors etc. The following is the formula for calculation of total wages of a worker:
Total earnings = S x R + 75% of R (S - T)
Illustration: 11
From the following particulars, calculate total earnings of a worker under Bedaux Point Premium
System:
Standard Time
Time Taken
Rate per hour
= 360 B
= 240 B
= Re. 1
397