Both direct and indirect labour of a department in a factory are entitled to production bonus in

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Both direct and indirect labour of a department in a factory are entitled to production bonus in accordance with a group incentive scheme, the outline of which is as follows:
(a) For any production in excess of the standard rate fixed at 10,000 units per month (of 25 days) a general incentive of Rs. 10 per unit is paid in aggregate. The total amount payable to each separate group is determined on the basis of an assumed percentage of such excess production being contributed by it, namely @ 70% by direct labour, @ 10% by inspection staff, @ 12% by maintenance staff and @ 8% by supervisory staff.
(b) Moreover, if the excess production is more than 20 per cent above the standard, direct labours also get a special bonus @ Rs. 5 per unit for all production in excess of 120% of standard.
(c) Inspection staff are penalised @ Rs. 20 per unit for rejection by customer in excess of 1% of production.
(d) Maintenance staff are also penalised @ Rs. 20 per hour of breakdown.

From the following particulars for a month, work out the production bonus earned by each group:
(a) Actual working days: 20
(b) Production: 11,000 units
(c) Rejection by customer: 200 units
(d) Machine breakdown: 40 hours.

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Cost Accounting

ISBN: 9780070221628

4th Edition

Authors: Jawahar Lal, Seema Srivastava

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