A worker whose day wages are Rs. 2.50 per hour received a production bonus under the Rowan scheme. He carried out the following work in a 48-hour week: Job 1 – 1,500 items at 4 hours per 1,000 Job 2 – 1,800 items at 3 hours per 1,000 Job 3 – 9,000 items at 6 hours per 1,000 Job 4 – 1,500 items for which […]

In a manufacturing concern, the bonus to workers is paid on a slab rate based on cost savings towards labour and overheads. The following are the slab rates: up to 10% saving 5% of earning up to 15% saving 9% of earning up to 20% saving 13% of earning up to 30% saving 21% of earning up to 40% saving 28% of earning above 40% […]

From the following particulars, calculate the group bonus payable in this case and the amount that will be paid to each member of the group. The standard production in a week is 120 units. It is agreed that for every 10% increase in production, a bonus of 5% of the total wages payable of the week will be paid and the same will be shared […]

XYZ Ltd employs workers for a single shift of 8 hours for 25 days in a month. The company has recently fixed the standard output for a mass production item and introduced an incentive scheme to boost the output. Details of wages payable to the workers are as follows: Basic wages/piece-work wages @ Rs. 2 per unit subject to a guaranteed minimum wages of Rs. […]

Two fitters, a labourer and a boy undertake a job of piece for a rate of Rs. 1,290. The time spent by each of them is 220 ordinary working hours. The rates of pay on a time-rate basis are Rs. 1.50 per hour for each of the two fitters, Re. 1 per hour for the labourer and Re. 0.50 per hour for the boy. Now […]

From the following data, you are required to compute the amount of fixed, variable and total semi-variable expenses for the month of October 2009, where the production is 50 units. Month Production (Units) Semi-Variable Expenses (Rs.) April 2009 60 320 May 2009 40 280 June 2009 70 340 July 2009 100 400 August 2009 80 360 September 2009 90 380

ABC Co. Ltd is a manufacturing company. It produces two products A and B. It has assigned 2 and 5 points to A and B, respectively, in order to compensate for the basic differences in products. The estimated factory overhead for the budget period is Rs. 2, 40,000. The normal capacity is: A 5,000 units B 6,000 units You are required to calculate the overhead […]

Model: Combination of Labour hour and Machine hour methods The following information relates to the activities of a production department for a certain period in a factor: Materials used 36,000 Direct wages 30,000 Hours of machine operation 10,000 Labour hours worked 12,000 Overheads chargeable to the department 24,000 On one order carried out in the department during the period, the relevant data collected were as […]

Model: Machine hour rate You are required to calculate the machine hour rate from the following: Cost of machine 40,000 Cost of installation 4,000 Scrap value after 10 years 4,000 Rates and rents for a quarter of the shop: 1,200 General lighting 400 p.m. Shop supervisor’s salary per quarter 12,000 Insurance premium for a machine 240 p.a. Repairs (estimated) 400 p.a. Power 3 units per […]

Highest and best use vs. current use [IFRS 13.IE7-8] An entity acquires land in a business combination. The land is currently developed for industrial use as a site for a factory. The current use of the land is presumed to be its highest and best use unless market or other factors suggest a different use. Nearby sites have recently been developed for residential use as […]