LABOR COSTING

Production based 1. Mr. Alex worked for a particular month and produced following units
Week 1 2 3 4 Production 300 450 625 430 Units Rejection 10 35 30 18

Company policy for payment of remuneration is: Units Unit rate $ 1 to 150 6 151 to 400 7 401 to 550 8 Above 550 9 Company guarantees minimum wage of 2,500 per week and deducts penalty of $2 per unit. Required Calculate weekly wages of Mr. Alex

2. A Company operates a differential piecework system and the following weekly rates have
been set: Units 1 to 500 501 to 600 600 or above Unit rate $ 0.20 0.25 0.55

How much would be paid to the following employees for the week? Employee A output achieved = 800 units Employee B output achieved = 570 units A B

3. RK Company pays their employees at piecework hour produced method.

1 unit requires Hourly wage rate 2 hours $12 per hour

How much would be paid to the following employees for the week? Employee X output achieved = 100 units Employee Y output achieved = 125 units X Y

4. A Company calculates remuneration of labor at piecework hour produced method

Production of 5 units Hourly wage rate per hour $20/per hour

How much would be paid to the following employees for the week? Employee X output achieved = 420 units Employee Y output achieved = 355 units X Y

5. Active plc uses piece work hours produced method for labor remuneration. Basic rate is $6
per labor hour. Component 1 requires Component 2 requires 5 hours 15 minutes

During a particular week Mr. A produced 100 units of component 1 and 550 units of component 2. Required Calculate weekly wages of Mr. A.

Time based 6. A company produces a product that requires 4 hours. The company has currently employed
100 employees who normally work 8 hours a day and 5 days a week. Following information relates to a particular month. Hours worked Units produced 17000 hours 5000 units

What will be the labor cost if company pays a bonus of 75% of time saved? The normal hourly rate is $6/hour and overtime is paid at one and half Following information relates to Q#7 to Q#10 A company has 20 direct workers and 10 indirect employees. The normal working hours per week for both kind of labor are 40 hours. The rate of pay per hour for direct labor is $8/hour and for indirect worker it is $10/hour. Overtime is paid at one and half. During a particular month direct labor worked 4000 hours and indirect workers worked 2000 hours. Standard time to produce one unit was 3hours and units produced during the month were 1500 units. The company has a policy of paying 70% of time saved as a bonus to direct labor. (Treating bonus as direct labor cost as it is productivity bonus)

7. 8. 9. 10.

Total direct labor cost for the month is___________ Total indirect labor cost for the month is ____________ Actual direct labor cost per unit _________ What will be the total direct labor cost if direct labor is paid on piecework hours produced method and rate of Pay is $8 per standard hour ____________

Following information relates to Q#11 to Q#14 A company has 15 direct workers and 8 indirect employees. The normal working hours per day are 8 hours. The rate of pay per hour for direct labor is $10/hour and for indirect worker it is $12/hour. Overtime is paid at one and half. During a particular month direct labor worked 4000 hours and indirect workers worked 2200 hours. Standard time to produce one unit was 4hours and units produced during the month were 1300 units. The company has a policy of paying 70% of time saved as a bonus to direct labor. (Treating bonus as direct labor cost as it is productivity bonus).

11. Total direct labor cost for the month is___________ 12. Total indirect labor cost for the month is ____________ 13. Total direct labor cost per unit _________ 14. What will be the total direct labor cost if direct labor is paid on piecework hours produced
method and rate of pay is $10 per standard hour ____________