ZED Limited employing 50 skilled workers is considering the introduction of incentive scheme-either Halsey scheme (with 50%

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ZED Limited employing 50 skilled workers is considering the introduction of incentive scheme-either Halsey scheme (with 50% bonus) or Rowan scheme of wage payment for increasing the labour productivity to cope up the increasing demand for the product by 40%. It is believed that 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.

Because of assurance, the increase in productivity has been observed as revealed by the figures for the month of April, 2004.


Required:

(i) Calculate the effective rate of earnings under the Halsey scheme and the Rowan scheme.
(ii) Calculate the savings to the ZED Limited in terms of direct labour cost per piece.
(iii) Advise ZED Limited about the selection of the scheme to fulfill their assurance.

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Related Book For  answer-question

Cost Accounting

ISBN: 9780070221628

4th Edition

Authors: Jawahar Lal, Seema Srivastava

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