5. Bonus under Rowan Scheme to be paid to 128 workers: Bonus = Time taken Time allowed × Time saved × hourly rate = 25,600 hours 31,250 hours × 5,650 hours × ` 30 = `1,38,854.4 Total wages to be paid to 128 workers are (` 7,68,000 + ` 1,38,854.4) ` 9,06,854.4, if company considers the introduction of Rowan Incentive Scheme to increase the Employee productivity. (i)
Options
ASaving in terms of direct Employee cost per piece under
Halsey scheme:
(Refer to Working Note 4)
Employee cost per piece (under time wage scheme)
= 2.5hours × ` 30 = ` 75.
Employee cost per piece (under Halsey scheme)
=
Total wages paid under the scheme
Total number of units produced
=
8,52,750
`
12,500
= ` 68.22
Saving per piece: (`75 – `68.22)
= `6.78
BSaving in terms of direct Employee cost per piece under
Rowan Scheme:
(Refer to Working Note 5)
Employee
cost
per
piece
under
Rowan
scheme
= 9,06,854.4
12,500
`
= `72.548
Saving per piece = ` 75 – ` 72.548
= ` 2.452
(iv) Since the company has assured 15% increase over present
earnings i.e. ` 7,68,000 which comes to ` 8,83,200 and total wages
under halsey scheme and rowan scheme are `8,52,750 and
` 9,06,854.4 respectively, so the company is advised to select the
rowan scheme of wage payment to fulfill its requirement of 15%
increase.
C
D
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