Question

Q4

a)     In a day of 8 hours at Spice LLC, the standard time allowed by the company is 1 hour to produce 20 units. Following is the actual production of selected workers during 8 hours:

Mr. Nasr                     140 units

Mr. Zakir                    200 units         

Mr. Akbar                   160 units

Normal piece rate to be given for standard production is OMR 50 per unit.

Differentials to be applied:    

80% of Piece rate below standard.

120% of Piece rate at or above standard.

Required:        Calculate the earnings of workers under Taylor’s differential piece rate system.                                                                                                                                                    

b)     Spice LLC wants to assess different methods of workers’ payroll calculation. It has provided below the data on a worker for calculation of earnings:

Time taken: 10 hours time Rate:      OMR 10 per hour       Time allowed: 14 hours

      Required:        Calculate worker’s earning under Halsey Premium Plan and Rowan plan.                                                                                                                                                               

c)     Following information is provided by HR department of Spice LLC:

Number of workers on pay roll:

            At the beginning of the month:               1,000

            At the end of the month:                         1,200

During the month, 30 workers left, 40 workers were terminated by the company. A total of 200 workers were recruited. Out of total recruitment, 50 workers are recruited in place of the staff leaving the company for any reason, while the rest were hired for expansion purpose.

Required: Calculate the labor turnover rate using, addition method, separation method, replacement method,,and flux method.

Answer 1

a) Standard time allowed by the company for production of 20 units is 1 hr.

So standard production for 8 hrs = 20 units*8hrs=160 units.

Rate per unit= 50

Mr Nasr: Units produced = 140 units

This is below the standard. Hence 80% of piece rate is allowed.

Total earnings= 140 units*(80% of 50)= 5600

Mr Zakir: Units produced = 200 units

This is above the standard. Hence 120% of piece rate is allowed.

Total earnings= 200 units*(120% of 50)= 12000

Mr Akbar: Units produced = 160 units

This is equal to the standard. Hence 120% of piece rate is allowed.

Total earnings= 160 units*(120% of 50)= 9600

b) Halsey Premium Bonus Plan

Formula= T*R+50% of (S-T)*R

where, T= Actual no. of hours taken

R= Rate per hour

S= Standard time allowed

Using the above formula= 10*10+50% of (14-10)*10

=100+50% of 40

=120

Rowan Premium Bonus Plan

Formula= T*R+(S-T/S)*T*R

Using the above formula=10*10+(14-10/14)*10*10

=100+(4/14)*100

=100+28.57

=128.57

c) Addition Method

Formula= No of accessations/Avg no of workers during the month*100

(No of accessations means the total no of employees who have joined)

=200/1100*100

=18.18%

Seperation method

Formula= No. of seperations/Avg no of workers during the month*100

=30+40/1100*100

=70/1100*100

=6.36%

Replacement method

Formula= No. of replacements/Avg no of workers during the month*100

=50/1100*100

=4.55%

Flux Method

Formula= No of seperations+No of accessations/Avg no of workers during the month*100

(No of accessations means the total no of employees who have joined)

=70+200/1100*100

=24.55%