LABOUR

1. Gross pay ₹10,30,000 (including cost of idle time hours paid to employee ₹25,000);
Accommodation provided to employee free of cost [this accommodation is owned by employer,
depreciation of accommodation ₹1,00,000, maintenance charges of the accommodation ₹90,000,
municipal tax paid for this accommodation ₹3,000], Employer’s Contribution to P.F. ₹1,00,000
(including a penalty of ₹2,000 for violation of PF rules), Employee’s Contribution to P.F.
₹75,000, Festival Bonus ₹20,000, Festival Advance ₹30,000.
Annual working days – 310 days of 8 hours each. Total leave with pay permitted in a year – 30
days. Normal Idle time – 240 hours Abnormal Idle time – 100 hours
Compute the Employee cost for the year per head and per hour. Also state how the Idle time is to
be treated.

2. ‘X’ an employee of ABC Co. gets the following emoluments and benefits:
(a) Basic pay ₹10,000 p.m. (b) Dearness allowance ₹ 2,000 p.m. (c) Bonus 20% of salary and
D.A.(d) Other allowances ₹ 2,500 p.m. (e) Employer’s contribution to P.F. 10% of salary and
D.A.
‘X’ works for 2,400 hours per annum, out of which 400 hours are non-productive and treated as
normal idle time. You are required to compute the effective hourly cost of employee ‘X’.

3. In a factory working six days in a week and eight hours each day, a worker is paid at the rate of ₹
100 per day basic plus D.A. @ 120% of basic. He is allowed to take 30 minutes off during his
hours shift for meals-break and a 10-minute recess for rest. During a week, his card showed that
his time was chargeable to:
Job X - 15 hrs. Job Y - 12 hrs. Job Z - 13 hrs.
The time not booked was wasted while waiting for a job. In Cost Accounting, state how would
you allocate the wages of the workers for the week?

4. Calculate the earnings of A and B from the following particulars for a month and allocate the
employee cost to each job X, Y and Z:
Particulars A B
Basic Wages ₹ 10,000 ₹ 16,000
Dearness Allowance 50% 50%
Contribution to Provident 8% 8%
fund (on basic)
Contribution to Employee’s 2% 2%
State Insurance (on basic
wages)
Overtime (Hours) !0 --
Overtime was done on Job Y.
The normal working hours for the month are 200. Overtime is paid at double the total of normal
wages and dearness allowance. Employer’s contribution to state Insurance and Provident Fund
are at equal rates with employees’ contributions. The two workers were employed on jobs X, Y
and Z in the following proportions:
Jobs X Y Z
Worker A 40% 30% 30%
Worker B 50% 20% 30%
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5. Calculate the total earnings and effective rate of earnings per hour of three operators under
Halsey System and Rowan System from the following particulars.
The standard time fixed for producing 1 dozen articles is 50 hours. The rate of wages is ₹1/- per
hour.
The actual time taken by three are as follows:- A 45 hours B 40 hours C 30 hours.

6. A workman takes 9 hours to complete a job on daily wages and 6 hours on a scheme of payment
by results. His hourly rate is 25 p. The Material cost of the product is ₹4 and factory overheads
are recovered at 150% of the total direct wages. Calculate the factory cost of the product under
following methods:- (a) Time rate system (b) Halsey Plan (c) Rowan Plan.

7. Two workmen, ‘A’ and ‘B’, produce the same product using the same material. Their normal
wage rate is also the same. ‘A’ is paid bonus according to the Rowan system, while ‘B’ is paid
bonus according to the Halsey system. The time allowed to make the product is 50 hours. ‘A’
takes 30 hours while ‘B’ takes 40 hours to complete the product. The factory overhead rate is ₹ 5
per man-hour actually worked. The factory cost for the product for ‘A’ is ₹ 3,490 and for ‘B’ it is
₹ 3,600.
Required: (a) Compute the normal rate of wages; (b) Compute the cost of materials cost; (c)
Prepare a statement comparing the factory cost of the products as made by the two workmen.

8. A skilled worker in XYZ Ltd. is paid a guaranteed wage rate of ₹ 30 per hour. The standard time
per unit for a particular product is 4 hours. P, has been paid wages under the Rowan Incentive
Plan and he had earned an effective hourly rate of ₹ 37.50 on the manufacture of that particular
product.
What could have been his total earnings and effective hourly rate, had he been put on Halsey
Incentive Scheme (50%)?

9. Using Taylor’s differential piece rate system, find the earnings of the A, B and C from the
following particulars:
Standard time per piece 20 minutes
Normal rate per hour ₹ 9.00
In a 8 hour day: A produced 23 units
B produced 24 units
C produced 30 units

10. Four workmen A, B, C and D work together as a team and are paid on Group Piece Rate. They
also work in hourly rate jobs. In a 44 hour week, the following hours have been spent by them on
group piece work: A – 40 Hours, B – 40 Hours, C – 30 Hours and D – 20 Hours. The balance of
the time in the week has been booked by each worker on day work jobs. Their hourly rates are as
follows: A = ₹ 3.00, B = ₹ 4.50, C = ₹ 6.00, D = ₹ 6.00.
The piece rate is ₹ 6 per unit and the team has produced 150 unts. Calculate the gross weekly
earnings of each workman taking into consideration that each individual is entitled to Dearness
Allowance of ₹ 50 per week.

11. The extracts from the payroll of M/s. M is as follows: -

Number of employees at the beginning of 2020 150
Number of employees at the end of 2020 200
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Number of employees resigned 20
Number of employees discharged 5
Number of employees replaced due to resignation and 20
discharges
Calculate the Labour Turnover Rate for the factory by different methods.
12. The Accountant of Y Ltd. has computed employee turnover rates for the quarter ended 31st
March 2020 as 10%, 5% and 3% respectively under ‘Flux method’, ‘Replacement method’ and
‘Separation method’ respectively. If the number of workers replaced during that quarter is 30,
find out the number of workers for the quarter. (i) recruited and joined and (ii) left and
discharged.

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