Question

In: Accounting

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 1 year ago
Next > < Previous

Related Solutions

The demand for T-shirts is Q=20 – (P/2), where Q is the number of t-shirts and...
The demand for T-shirts is Q=20 – (P/2), where Q is the number of t-shirts and P is the price. The private cost of producing t-shirts is C(Q) = Q^2, with the private marginal cost being MC(P) = 2Q. Washing and dyeing t-shirts causes water pollution with marginal external costs of MC(E) = Q. A) Based on the above information, net welfare: consumer surplus + producer surplus - damages of consumption at market equilibrium is ______(no decimal point)...(numeric answer). Hint:...
Cougar Athletics is soliciting bids on a 3-year contract to produce 3,000 t-shirts per year to...
Cougar Athletics is soliciting bids on a 3-year contract to produce 3,000 t-shirts per year to be given away at athletic events. You have decided to bid on the contract. It will cost you $3 per shirt in variable costs (buying plain t-shirts and paying an employee to imprint them) and $5,000 per year in fixed costs. A t-shirt printing machine will cost $7,500. The machine will be depreciated to zero over its 3-year life and it will not have...
Cougar Athletics is soliciting bids on a 3-year contract to produce 3,000 t-shirts per year to...
Cougar Athletics is soliciting bids on a 3-year contract to produce 3,000 t-shirts per year to be given away at athletic events. You have decided to bid on the contract. It will cost you $3 per shirt in variable costs (buying plain t-shirts and paying an employee to imprint them) and $5,000 per year in fixed costs. A t-shirt printing machine will cost $7,500. The machine will be depreciated to zero over its 3-year life and it will not have...
Helen Croker has been discussing production costs with others in the garment industry. Lean thinking was...
Helen Croker has been discussing production costs with others in the garment industry. Lean thinking was a term other producers have been discussing as a way of controlling costs. Climbing costs are eating away at Helen's profits, so to reduce costs she thought of moving production offshore. Going offshore will make it more difficult to maintain quality while keeping production onshore enables her to contribute to her local community. She has come to you, a partner in Good Numbers, asking...
The demand curve for T-shirts in the US is given by Q = 100 – 2*P....
The demand curve for T-shirts in the US is given by Q = 100 – 2*P. Suppose that there are no T-shirts produced in the US, but they can be imported either from Mexico or from the rest of the world. The price of T-shirts in Mexico is $20, and the price from the lowest-cost supplier in the rest of the world is $15. The US charges a tariff of $10 per unit imported. a) Consider the case where there...
A manager is trying to determine which of three production processes to implement to produce a component for a new product line.
A manager is trying to determine which of three production processes to implement to produce a component for a new product line. Process A would entail a variable cost of $17 per unit and an annual fixed cost of $150,000. Process B would entail a variable cost of $11 per unit and an annual fixed cost of $250,000. Process C would entail a variable cost of $20 per unit and an annual fixed cost of $180,000.a. Develop three separate models...
A manager is trying to determine which of three production processes to implement to produce a component for a new product line.
A manager is trying to determine which of three production processes to implement to produce a component for a new product line. Process A would entail a variable cost of $17 per unit and an annual fixed cost of $150,000. Process B would entail a variable cost of $11 per unit and an annual fixed cost of $250,000. Process C would entail a variable cost of $20 per unit and an annual fixed cost of $180,000.Develop three separate models in...
A manager is trying to determine which of three production processes to implement to produce a component for a new product line.
A manager is trying to determine which of three production processes to implement to produce a component for a new product line. Process A would entail a variable cost of $17 per unit and an annual fixed cost of $150,000. Process B would entail a variable cost of $11 per unit and an annual fixed cost of $250,000. Process C would entail a variable cost of $20 per unit and an annual fixed cost of $180,000.a. Develop three separate models...
Production planning is the systematic and strategic design of production processes that can produce products and...
Production planning is the systematic and strategic design of production processes that can produce products and deliver services quickly, precisely, and efficiency that achieve a set of common objectives. The principle objective of this process is to stay competitive. A successful process design has to take into account the appropriateness of the process to overall organization objective. Process design requires a broad view of the whole organization and should not have a myopic outlook. And the process should deliver customer...
2. A city is hosting an annual marathon event and wants to produce t-shirts. Maria was...
2. A city is hosting an annual marathon event and wants to produce t-shirts. Maria was able to obtain previous years’ demand and probability data as given in below table. She also estimates: Selling price is $10, cost is $3, and the salvage value is $1. Calculate all numbers in the payoff table. Show all work. How many shirts should be made to maximize profit? Demand = 1000, 20% Demand = 2000, 30% Demand = 3000, 30% Demand = 4000,...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT