COST AND MANAGEMENT ACCOUNTING AND ACCOUNT
VISHESH ACADEMY OF COMMERCE
DSS-33, OLD COURT COMPLEX, NEAR FAWARA CHOWK , HISAR.
COST AND MANAGEMENT ACCOUNTING AND ACCOUNT
CA INTER
(TEST 1– CHAPTER 3 LABOUR COSTING COSTING)
Time: 40Min. Marks: 25
Question 1: M/s ABC allotted a standard time of 40 hours for a job and the rate per hour is Rs.75. The actual
time taken by a worker is 30 hours. You are required to calculate the total earnings under following plans:-
Halsey Premium Plan
Rowan Plan (2 Marks)
Question 2: You are provided the following information:-
Salary (each employee, per month) Rs.30000
Bonus 15% of Salary
Employer contribution to PF 20% of Salary
Employees welfare expenses p.a Rs.661500
Permitted leave days 30 Days
No. of employees 175
Normal Idle Time 70 Hours p.a.
Idle time due to power failure 50 Hours
Working days p.a. 310 days of 8 hours
Calculate following:-
Annual cost of employee
Employee Cost per hour
Cost of abnormal idle time per employee (5 Marks)
Question 3: Z Ltd is working by employing 50 skilled workers. It is considering the introduction of an
incentive scheme - either Halsey Scheme (with 50% Bonus) or Rowan Scheme - of wage payment for
increasing the labour productivity to adjust with the increasing demand for its products by 40%. The
company feels that if the proposed incentive scheme could bring about an average 20% increase over the
present earnings of the workers, it could act as sufficient incentive for them to produce more and the
company has accordingly given assurance to the workers
Because of this assurance, an increase in productivity has been observed as revealed by the figures for the
month ofApril,2020:
Hourly rate of wages(guaranteed) Rs.50
Average time for producing one unit by one worker at the previous performance(this may 1.975hours
be taken as time allowed)
Number of working days in a month 24
Number of working hours per day of each worker 8
Actual production during the month 6,120units
Required:
Calculate the effective increase in earnings of workers in percentage terms under Halsey and Rowan scheme.
Calculate the savings to Z Ltd in terms of direct labour cost per unit under both the schemes.
1 VISHESH ACADEMY OF COMMERCE : FOR CLASSES CONTACT : 9813170795,9729070795
COST AND MANAGEMENT ACCOUNTING AND ACCOUNT
Advise Z Ltd about the selection of the scheme that would fulfill its assurance of incentivizing workers and
also to adjust with the increase in demand. (10 Marks)
Question 4: Describe the treatment of following:-
Idle time during setting up of machine
Idle & overtime due to lockouts
Overtime for specific requirement of the customer
Overtime due to fault of management
Income tax paid by employer on income of employee (3 Marks)
Question 5: A ltd. has calculated labour turnover as 12%, 6% and 4% under Flux method, Replacement and
Separation method. If the number of workers replaced during the period is 40. Find:-
Recruited and joined
Left and discharged
Equivalent employee turnover for year if rate are quarterly. (5 Marks)
2 VISHESH ACADEMY OF COMMERCE : FOR CLASSES CONTACT : 9813170795,9729070795
