Halsey Premium plan

1. Time allowed for a job is 48 hours; a worker takes 40 hours to complete the job.
Time rate per hour is `15. Compute the total earnings of the worker.

Solution:
Total Earnings = H X R + 50% [S – H] R
Total Earnings = 40 X `15 + 50% [48 – 40] `15
Total Earnings = `600 + `60 = `660

Question 1

Calculate the total earnings and effective rate of earnings per hour of three operators
under Rowan System and Halsey System from the following particulars.
The standard time fixed for producing 1 dozen articles is 50 hours. The rate of wages is
`1/- per hour.
The actual time taken by three are as follows:-
A 45 hours
B 40 hours
C 30 hours

Computation of Total Earnings of workers under Halsey Plan

Earnings under Halsey Plan = Hours worked × Rate per hour + (50% × Time saved × Rate per hour)

Computation of Total Earnings of workers under Rowan Plan

Earnings under Rowan Plan =
Hours worked × Rate per hour + (Time allowed X Hours worked X Rate per hour)

Time saved
Question 2

A workman takes 9 hours to complete a job on daily wages and 6 hours on

a scheme of payment by results. His hourly rate is 25 p. The Material cost
of the product is `4 and factory overheads are recovered at 150% of the
total direct wages. Calculate the factory cost of the product under
following methods:-
(a) Time rate system
(b) Halsey Plan
(c) Rowan Plan.

Computation of factory cost under three systems

Working Notes:

Question 3

A worker under the Halsey method of remuneration has a day rate of `12 per week of 48
hours, plus a cost of living bonus of 10 p. per hour worked. He is given 8 hours task to
perform, which he performs in 6 hours, he is allowed 30% of the time saved as premium
bonus. What would be his earnings under Halsey Plan and Rowan Plan.

Computation of earnings of worker under Halsey Plan:

Earnings under Halsey Plan = Hours worked × Rate per hour + (30% × Time Saved ×
Rate per hour)
= (6 x 0.25) + 30/100 (8-6) x 0.25 = 1.65
(+) Cost of Living Bonus (6 x 0.1) =
0.60 =
Rs2.25
Earnings under Halsey Plan = Rs2.25
Earnings under Rowan Plan = RS 2.48
Question 4

In a factory guaranteed wages at the rate of ` 1.80 per hour are paid in a
48 hour week. By time and motion study it is estimated that to
manufacture one unit of a particular product 20 minutes are taken, the
time allowed is increased by 25% . During the week A produced 180 units
of the product. Calculate his wages under the following methods:
(a) Time Rate.
(b) Piece Rate with a guaranteed weekly wage.
(c) Halsey premium Bonus.
(d) Rowan Premium Bonus

(a) Calculation of wages under Time Rate System

Earnings under time wages = TR = 48 × 1.8 = ` 86.4

(b) Calculation of wages under Piece Rate with a Guaranteed Wage Rate
Normal Time for one unit = 20 minutes
(+) Relaxation allowance @ 25% = 5 minutes
Standard Time = 25 minutes
No. of pieces per hour = 60/25 pieces.
Piece Rate = Hourly Rate / No. of pieces per hour
= 1.8 ÷ (60/25)
= 0.75
Earnings under Piece Rate = 180 x 0.75 = Rs 135

(c) Calculation of wages under Halsey Premium Bonus

Standard time for actual production = 180 x 25 / 60 = 75 hours
Earnings under Halsey Plan =
= (48 x 1.8) + 50/100 (75-48) x 1.8
= 86.4 + 24.3 = Rs 110.70

(d) Calculation of wages under Rowan Premium Bonus

Standard time for actual production = 180 x 25 / 60 = 75 hours
Earnings under Rowan Plan = (48 x 1.8) + (75-48 / 75) x (48 x 1.8)
= 86.4 + 31.104 = Rs
117.50