Two workmen, 'A' and 'B', produce the same product using the same material. Their normal wage rate is also the same. 'A' is paid bonus according to the Rowan system, while ' B ' is paid bonus according to the Halsey system. The time allowed to make the product is 50 hours. 'A' takes 30 hours while ' B ' takes 40 hours to complete the product. The factory overhead rate is 5 per man-hour actually worked. The factory cost for the product for ' A ' is 3,490 and for ' B ' it is 3,600. The Institute of Chartered Accountants of India 3.28 COST AND MANAGEMENT ACCOUNTING Required: (a) COMPUTE the normal rate of wages; (b) COMPUTE the

Two workmen, 'A' and 'B', produce the same product using the same material. Their normal wage rate is also the same. 'A' is paid bonus according to the Rowan system, while ' B ' is paid bonus according to the Halsey system. The time allowed to make the product is 50 hours. 'A' takes 30 hours while ' B ' takes 40 hours to complete the product. The factory overhead rate is 5 per man-hour actually worked. The factory cost for the product for ' A ' is 3,490 and for ' B ' it is 3,600. The Institute of Chartered Accountants of India 3.28 COST AND MANAGEMENT ACCOUNTING Required: (a) COMPUTE the normal rate of wages; (b) COMPUTE the cost of materials cost; (c) PREPARE a statement comparing the factory cost of the products as made by the two workmen. Two workmen, 'A' and 'B', produce the same product using the same material. Their normal wage rate is also the same. 'A' is paid bonus according to the Rowan system, while ' B ' is paid bonus according to the Halsey system. The time allowed to make the product is 50 hours. 'A' takes 30 hours while ' B ' takes 40 hours to complete the product. The factory overhead rate is 5 per man-hour actually worked. The factory cost for the product for ' A ' is 3,490 and for ' B ' it is 3,600. The Institute of Chartered Accountants of India 3.28 COST AND MANAGEMENT ACCOUNTING Required: (a) COMPUTE the normal rate of wages; (b) COMPUTE the cost of materials cost; (c) PREPARE a statement comparing the factory cost of the products as made by the two workmen