Cost and Management AccountingMCQQuestion 6157 of 249
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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)

Select Your Answer (Keyboard: A, B, C, D)
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Correct Answer

✅ Option A — Saving 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

All 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

Detailed Solution & Explanation

Correct Answer: Option **A** Explanation: As per the official suggested answer, option **A** is correct. Hence, **Option A** is the correct answer.

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