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Q.3 Mohammed Garment Industry workers produce T- Shirts. The three basic processes of garment production are...

Q.3 Mohammed Garment Industry workers produce T- Shirts. The three basic processes of garment production are cutting, sewing and pressing. According to the Labour department there are 5 sewing operator, 10 cutting operators and 8 pressing operators. the Standard rate per hour for operators is OMR 25, Normal rate per hour is OMR 30, Normal rate per unit is OMR 25, Working hours per day are 8 hours, Standard Output per hour is 120 units. Five workers Khalid, Rashid, Ahmed, Khamis and Nasir were engaged in the Sewing work and receives earnings by using Merrick Differential Piece Rate System. The Output is as follows Khalid 1,120 units, Rashid 600 units, Ahmed 875 units, Khamis 795 units and Nasir 940 units. You are required to calculate the earnings of all the five workers of sewing operators and also identify which of the workers performance is more than 100% among all.

Answer:

Solutions

Expert Solution

Under the Merrick Differential Piece Rate System, workers are classified into three categories and three piece rates are used as under

Level of Efficiency

Pay Out

Up to 83.33% Efficiency

Paid at Normal Piece Rate

Between 83.33% to 100% Efficiency

Paid Normal Rate + 10% of Normal Rate as Incentive

Above 100%

Paid Normal Rate plus 20% of Normal Rate as Incentive

Step-1: Calculation of Standard Output Per Day

Standard Output Per Hour = 120 units

Working Hours Per Day = 8

Standard Output Per Day = 120 * 8 = 960 units

Normal Piece Rate = 25 OMR

Step-2: Calculation of Workers Efficiency and Pay Rate:

Worker

Actual Output

Efficiency

Pay Rte

Khalid

1120

1120 /960 = 116.66%

120%

Rashid

600

600 / 960 = 62.5%

100%

Ahmed

875

875 / 960 = 91.14%

110%

Khamis

795

795 / 960 = 82.81 %

100%

Nasir

940

940 / 960 = 97.91 %

110%

Step-3: Calculation of Earnings of Sewing Workers:

a) Khalid:

     Actual Output = 1,120 units

   Earnings = 1,120 * (25 * 120/100) = 1120 * 30 = OMR 33,600

b) Rashid

     Actual Output = 600 units

   Earnings = 600 * 25 = OMR 15,000

c) Ahmed:

       Actual Output = 875

   Earnings = 875 * (25 * 110 / 100) = 875 * 27.5 = OMR 24,062.50

d) Khamis

      Actual Output = 795

Earnings = 795 * 25 = OMR 19,875

e) Nasir

    Actual Output = 940

Earnings = 940 * (25 * 110 /100) =940 * 27.5 = OMR 25,850

ekkarill92 answered 2 years ago
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