Page 13 - Cost Accounting - Ready Reckoner

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TIME RATE SYSTEM:

1. Straight Time Rate = Hours Worked (H.W) x Rate/ hour.

2. Differential Time Rate:
a) Halsey Plan:
Hours Worked (H.W) x Rate/ hour + 50% [Time Saved (T.S) x Rate/hour]

Basic Wage Incentive

Time Saved (T.S) = Time Allowed (T.A) – H.W

b) Rowan’s Plan:
.
Hours Worked (H.W) x Rate/ hour + (H.W x Rate/hour)
.
Basic Wage Incentive

c) Halsey Weir Plan:
Hours Worked (H.W) x Rate/ hour + 30% [Time Saved (T.S) x Rate/hour]

Basic Wage Incentive

d) Emerson’s Efficiency Plan:

Efficiency of Workers Wage rate
Less than 66 2/3% of efficiency Normal Time Rate (NTR)
Between 66 2/3% to 100% of efficiency NTR + Bonus
Bonus varies from 1% - 20%, such that 100% Efficiency – Bonus 20%
Above 100% efficiency NTR + 20% Bonus
+ 1% additional bonus for every 1% increase of efficiency.

e) Gantt Task & Bonus Plan:

It is a combination of Time rate and Piece rate plan.

Workers Payment
Below Standard Guaranteed Time Rate
At Standard Time rate + 20% bonus
Above Standard High Piece Rate

Apart from the above plans of payment of wages, there are group bonus schemes
where bonus is paid to labourers for efficient performance as a group.

If wages paid to labourers are on time basis, there arises wages to be paid for
Idle time and Over Time.