Page 160 - DCOM202_COST_ACCOUNTING_I

Cost Accounting – I

Notes 3. Explain the working of a method of remunerating production labour where production
can be measured and incentive to high productivity is necessary. Exclude straight piece
work method of pay.
4. “Increased productivity as a result of Premium Bonus Plans benefits both employer and
the employees”. Comment on this statement.
5. Define piece rates method,
6. Briefly distinguish among: straight piece rates, piece rates with guaranteed day rates and
differential piece rates.
7. What are the advantages and disadvantages of piece rates, and define time rates and its
advantages and disadvantages?

8. Explain the following by giving suitable examples:
(a) Halsey premium plan, (b) Rowan premium plan,
(c) Emerson premium plan, and (d) Gantt Difference piece Rate plan.
(e) Taylor Differential piece Rate, (f) Merric Differential piece Rate,
(g) Emerson Differential Time Rate, and (h) Halsey Weir premium plan.
9. The following particulars are available for a job:

Normal time rate : ` 4 per hour
High task (standard) unit per week : 60
In a 45 hours week, the production of workers was as follows.

Workers A B C D E
Units production 45 50 60 66 72
Calculate the earnings of the workers under (a) Piece rate, (b) Taylor method, (c) Merric
method.
10. The following particulars are available for a job:

Normal time rate : ` 5 per hour
Standard units per week : 80
In a 48 hours week, the production of workers was as follows:

Workers A B C D E
Units production 60 72 80 90 100

Calculate the earnings of the workers under Emerson Plan if bonus at different levels of
efficiency is paid as under:

Efficiency 75% 80% 90% 95% 100%
Bonus (%) 1.31% 3.27% 9.91% 14.53% 20.00%

11. Write short notes on the following :
(a) preventive costs, and (b) Replacement costs.

Answers: Self Assessment

1. True 2. True
3. True 4. False

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