Labour Cost Accounting

More documents

Recommendations

Info

1 At Ordinary Levels [ Time Rate System 1 I 1 At High Wage Levels Guranteed Time Rates 1 1 Taylor's Differential Piece Rate System 1 Straight Piece Rate Merrick Differential Piece Rate System 1 I I Halsey Premium Halsey-Weir Rowan Plan Premium Plan Plan Method of Remuneration I I Piece Rate System 1 I Piece Rate with Guranteed Time Rate 1 Gantt Task and Bonus Plan I 1 Differential Piece Rates 1 I I Bonus System 1 1 1 Individual Bonus Plan Group Bonus Plan I I Indirect Monetary Incentives 1 Non-monetary Incentives Barth Variable Emerson Efficiency Bedaux Point Accelerating Premium Sharing Plan Bonus Plan Premium Systems Plan • 1 ~ c ; '" ., ~ 0 l:< g: ~ 0" " 2 ~ :: :i" '" s· OCI 00 () ::r ~ () § 0 ~ 'E.. 21. 0 -::r (;i. 3 0 @ §. 0 s. e- o 3 0 e- o Co ...., '" 0 @ 3 c 0 ~. 0
386 A Textbook of Financial Cost and Management Accounting week, a fortnight or a month. The formula for calculation of payment of time rate of ordinary levels is as follows: Remuneration or Earnings = Hours Worked X Rate Per Hour Time wage system is suitable under the following conditions: (1) Where the units of output are difficult to measurable, e.g., watchman. (2) Where the quality of work is more important, e.g., artistic furniture, fine jewellery, carving etc. (3) Where machinery and materials used are very sophisticated and expensive. (4) Where supervision is effective and close supervision is possible. (5) Where the workers are new and learning the job. (6) Where the work is of a highly varied nature and standard of performance cannot be established. Advantages • (1) It is simple and easy to calculate. (2) Earning of workers are regular and fixed. (3) Time rate system is accepted by trade unions. (4) Quality of the work is not affected. (5) This method also avoids inefficient handling of materials and tools. Disadvantages (1) No distinction between efficient and inefficient worker is made and hence they get the same remuneration. (2) Cost of supervision are high due to strict supervision used for high productivity of labour. (3) Labour cost is difficult to control due to more payment may be made for the lesser amount of work. (4) No incentive is given to efficient workers. It will depress the efficient workers. (5) There is no specific standards for evaluating the merit of different employees for promotions. (b) Time Rate at High Levels: Under this system, efficient workers are paid higher wages in order to increase production. The main object of this method designed to remove the drawbacks of time rate at ordinary levels. This system is simple and easily understandable. When higher rate of wages are paid, it not only reduces labour turnover but also increases production and efficiency. (c) Guaranteed Time Rates: Under this method, the wage rate is calculated by considering to changes in cost of living index. Accordingly, the wage rate is varied for each worker according to the change in cost of living index. This system is suitable during the period of raising prices. (2) Piece Rate System This is also known as "Piece Wage System" or "Payment By Result." Under this system, wages of a worker are calculated on the basis of amount of work done or output of a worker. Accordingly, a worker is paid in direct proportion to his output.
Page 1 and 2: CHAPTER 17 Labour Cost Accounting I
Page 3: 384 (c) Differential Piece Rates: (
Page 7 and 8: 388 A Textbook of Financial Cost an
Page 13 and 14: 394 Illustration: 6 Solution: Time
Page 17 and 18: 398 Solution: Calculation of total
Page 19 and 20: 4()() A Textbook of Financial Cost

Labour Cost Accounting

Create successful ePaper yourself

Delete template?

Save as template?