Unit – III

Taylor’s Differential Piece rate system

Problem 3:
Standard Production per hour = 40units.
Normal time rate per hour = Rs. 4.
For Production of 1 unit = 4/40. = 0.10.
Standard Production per day (8 hours) = 8 * 40 = 320units.
Ram = 280units Shyam = 400 units
Ram produced below standard. Shyam Produced above Standard.
For below Standard 75%-piece For above Standard 125% of piece
rate. rate.

= (280 * 0.10) * (75/100) = (400 *0.1) * (125/100)

=Rs. 21 = Rs 50.

Problem 1:
A) Time Rate = Hours Worked * Rate per hour.
= 48 * 2
= Rs 96.

B) Piece Rate = No of Units Produced * Rate per unit.

Time taken per unit = 25 min
Add allowance 20% = 5 min
Standard Time per unit = 25 + 5 = 30minutes
For one hour we can produce = 2 units
For Per hour = Rs 2.
For one unit = Rs 1
Total no of units produced = 110 * 1 = Rs 110
As piece rate earning is greater than guaranteed wages, Das will get Rs 110
for the week.
Problem B2:
Standard time for a product = 12 hours
Normal Rate per hour Rs 0.25.

(i) Earnings of A:
A completes the product in 15 hours, which is than the standard time.
Time = = Hours Worked * Rate per hour.
= 15* .025
= Rs 3.75
Effective rate per hour = wages / hours worked.
= 3.75 / 15
= .025.
(ii) Earning of B
B completes the product in 12 hours, ie standard time.
He was entitled to 0.275 paise.
B wages = 0.275*12 = Rs. 3.30.
Effective rate per hour = wages / hours worked.
= 3.30 / 12
= 0.275.
(iii) Earnings of C:
C completes the product in 10 hours, less than Standard time.
C wages = 0.275*12 = Rs 3.30.
Effective rate per hour = wages / hours worked.
= 3.30 / 10
= 0.33.
(iv) Earnings of D:
D completes the product in 8 hours, less than Standard time.
D wages = 0.275*12 = Rs 3.3
Effective rate per hour = wages / hours worked.
 = 3.30 / 8
= 0.4125
Taylor’s Differential Piece Rate System

Problem B4:
Standard Production per unit in 20 seconds. (For one min 60/20 = 3 units)
For one-hour standard production = 3*60 = 180units
Normal Rate per hour = Rs 18.
For one unit rate = 18 / 180 = 0.10

Taylor’s differential piece rate system;

Below average = 0.10 * (80/100) = 0.08 Paise
Above Average = 0.10 * (120/100) = 0.12 Paise

Standard production per day = 180*8 = 1440units

A Earnings: 1400 units, below standard.
= 1400 * 0.08 = Rs. 112.
B earnings: 1500 units, above standard.
= 1500 * 0.12 = Rs. 180.

Straight piece rate system:

A: 1400* 0.10 = Rs. 140.
B: 1500* 0.10 = Rs. Rs. 150
Problem B5:
Standard time per piece = 20minutes.
Standard Production per hour = 60 / 20 = 3 units.
Normal Rate per hour = Rs. 1.50
For 3 units in one hour
Normal rate per piece for one = 1.50/3 = 0.50 Paise

Below Standard: (83% 0f Normal Rate)

= (.50) * (83/100)
= 0.415
Above Standard: (175% of Normal Rate)
= (0.50) * (175/100)
= Rs0.875
Standard Production per hour = 3 units
Per day they working 9 hours = 9 *3 = 27 units.
Earnings of X: Produces 25 (below standard)
= 25*0.415 = Rs 10.375.
Earnings of Y: Produces 30 (Above Standard)
= 30 * 0.875 = Rs 26.25.
 Merrick’s Multiple Piece Rate System:

Problem B6:
Standard Production Per hour = 6units
Standard Production per day of 8 hours = 8 * 6 = 48units.
Normal rate per hour = Rs 1.20.
Normal rate Per unit = 1.2/6 = Rs 0.20 per unit.

Earnings of X = 32 units.
Efficiency of X = 32/48 * 100= 67%.
X= 32 * 0.20 = Rs 6.40.

Earnings Y = 42 units
Efficiency of Y = 42/48 * 100 = 87.5%
Y = 42 * ((0.2) *(110/100))
= 42 * 0.22
= Rs 9.24.

Earnings of Z = 50units
Efficiency = 50/48 * 100 = 104%
Z = 50 * ((0.2) * (120/100)).
Z= 50 * 0.24
Z = Rs 12
Problem B7:
Standard Production in one minutes = 1 unit.
Standard production in one hour = 60*1 = 60 units.
Normal Rate per hour = Rs 1.80.
For 60 units, normal rate Rs 1.80.
For unit = 1.80/ 60 = 0.03 Paise.
For one day = 60 *8 = 480units standard production.

(i) Straight piece rate system:

A : 360 * 0.03 = Rs 10.80
B: 420 * 0.03 = Rs 12.60
C: 540 * 0.03 = Rs 16.2

(ii) Merrick piece rate:

Efficiency of A: 360/ 480*100 = 75%
= 360* 0.03= Rs 10.80.

Efficiency of B : 420 /480 *100 = 87.5%

= ((420*0.03) *(110/100))
= Rs 13.86.

Efficiency of C: 540 / 480 * 100 = 112.5%

= ((540*0.03)*(120/100)
= Rs. 19.44
 Gantt’s Task Bonus Method.
Problem B8:
Standard output = 10 units per hour.
Standard output per day of 8 hours = 80*1 = 80 Units
Normal rate per hour = Rs 1

Earnings of A:
A Produces 70units, which is below standard.
A earning = Hours worked * Rate per hour
= 8*1 = Rs 8.

Earning of B:
B produces 80 units, which is standard output.
B earning = Hours worked * Rate per hour = 8*1 = Rs 8.
20% Bonus = Rs 1.6
Total Rate = (Normal rate + Bonus) = 8 + 1.6 = Rs 9.60.

Earnings of C:
C produces 90units, which is above standard.
C = No of units produced * high piece rate.
= 90 * 0.20
= Rs 18.
 Part – C
Problem 1:
Taylors Differential Piece rate system:
Standard output per hour = 2 units
Standard output per week = 40 * 2 = 80units
Standard output = 80 units
L Produces 50 units K Produces 80 units S Produces 120 units
(below Standard) (Standard) (Above Standard)

= 0.60*83/100 = 0.498. = 0.60*(175/100) = Rs = 0.60*(175/100)

1.05 =1.05.
Earnings = Number of
units * Piece Rate Earnings = Number of Earnings = Number of
units * Piece Rate units * Piece Rate
= 50 * 0.498 = Rs 24.9
= 80 * 1.05. = Rs 84 = 120 *1.05 = Rs 126

Merricks Multiple piece rate system:

Standard output 80 units
L Produces 50 units K Produces 80 units S Produces 120 units
(below Standard) (Standard) (Above Standard)

= (50/80) *100 = 62.5% = (80/80) *100 =100% = (120/80) *100 = 150%

Below 83% 84% to 100% Above 100%

= 50 * 0.60 =80* 0.60 * (110/100) = 120 * 0.60 * (120/100)

= Rs 30.
= 52.8 =Rs 86.4
Gantt’s Task bonus Plan:
Standard output 80 units
L Produces 50 units K Produces 80 units S Produces 120 units
(below Standard) (Standard) (Above Standard)

= Hours worked* Rate = Hours worked* Rate Piece Wages

per hour per hour =120*0.60 = 72
= 40 *0.80 = 40 * 0.80 = 32
= Rs 32 20% Bonus
20% Bonus = (72/100) *20
= (32/100) *20 = 14.4
= 6.4
Total = 72 + 14.4 =
Total = 32 +6.4 = 38.4 86.4

Halsey Plan.
Problem 9: Total hour 8; completed in 6 hours and saved 2 hours.
(i) Earnings under Halsey plan: For 6 hours.
Earnings = Hours Worked * Rate per Hour + (50% of Time Saved * Rate per
Hour)
= 6 * 1 + (1 * 1)
= 6 +1
= 7.
(ii) Earnings under Halsey plan: For 8 hours.
= 8 * 1 + (0 * 1)
= 8.

Problem 10:
Earnings under Rowan plan:
=Hours worked* Rate per hour + (Time take / time allowed) * Time saved *
Rate per hour
Time allowed = 20 dozen 20 * 12 = 240 / 4 per hour = 60
= 48 * 0.75 + (48 / 60) * 12 * 0.75.
= 36 + 0.8 * 12 * 0.75.
= 36 + 7.2.
= 43.2.
Earnings under Halsey –Weir Plan:
Earnings = Hours Worked * Rate per Hour + (40% of Time Saved * Rate per
Hour)
= 48 * 0.75 + (40 % for 12 hours * 0.75)
= 36 + (4.8 *0.75)
= 36 + 3.6.
=39.6.

Problem 11:
(i) Earnings under Halsey Plan:
Earnings = Hours Worked * Rate per Hour + (50% of Time Saved * Rate per
Hour)
= 8*5 + (50 % of 2 hours * 5).
= 40 + (1*5).
= 40+ 5
=Rs 45.
(ii) Earning under Rowan Plan:
=Hours worked* Rate per hour + (Time take / time allowed) * Time saved *
Rate per hour.
= 8 * 5 + ((8/10) * 2 * 5).
= 40 + 0.8 * 10
= 40 + 8.
=Rs 48.
Effect of payment of wages (Employer’s savings)
Halsey Plan Rowan Plan
Rate per hour: Rate per hour:
10* 5 = 50. 10* 5 = 50.
Halsey plan = -45 Rowan Plan = -48
Savings = 5. Savings =2

Overhead’s rate = 2 * 6 = 12. Overhead’s rate = 2 * 6 = 12.

Total Savings = Rs 17. Total Savings = Rs 14.

Labor Turnover
Problem 16:
(i) Separation method:
= (No of Separations/ Average Number of Workers) X 100.
Avg no of Workers = 900 +1100/2 = 2000/2 = 1000.
= (10+40) / 1000 * 100
= 50/1000 *100
= 5%.
(ii) Replacement Method:
= (No of Replacement/ Avg no of workers) * 100.
= (25/ 1000) *100
= 2.5%.
(iii) Flux Method:
= (No of Separations + No of Replacement) / Avg no workers * 100
= (50+25) / 1000 *100
= (75 / 1000) * 100
= 7.5%.

Problem C2:
(i) Standard output for 1 hour = 80 pieces
Standard output per day 8 hours = 8 * 80 = 640 Pieces.
Actual Output = 800 Pieces
Extra Output = (800 – 640) = 160 Pieces.
Wages for hours worked (8 * 2 per hour) = Rs 16.
And Bonus for extra output = Rs 4.
Labour cost for 800 pieces = Rs 20.
Labour cost for 100 pieces = 100 * (20 /800) = Rs 2.50
Working for Bonus:
For extra output of 100 = Rs 2.50
For Extra output of 160 = 160/100 * 2.5 = Rs 4.

(ii) Standard output per hour = 80 pieces

Wage rate per hour = 16 / 8 = Rs 2.
For 1 unit = 2 / 80 = Rs 0.025.
Piece wages = No of units produced * rate per unit.
= 800 * 0.025
= Rs 20
Labour cost for 100 pieces = 100 * (20 /800) = Rs 2.50.

(III) Earnings under Halsey Plan:

Earnings = Hours Worked * Rate per Hour + (50% of Time Saved * Rate per
Hour)
= 8 * 2 + (50% of 2 * 2)
= 16 + 1* 2
= 16+ 2 = Rs 18.
Labour cost for 100 pieces = (18 /800) * 100 = Rs. 2.25

Problem C6:
Standard time per week = 48 hours.
Time taken = 40 hours
Time saved = 8 hours.
Rate per hour = Rs 15
Dearness Allowance = Rs 5
Total Rate per hour = Rs 20.
(i) Halsey Plan:
Earnings = Hours Worked * Rate per Hour + (50% of Time Saved * Rate per
Hour)
= 40 * 20 + (50% of 8 hours * 20)
= 800 + (4 * 20)
= 800 + 80 = Rs 880.

(ii) Rowan Plan:

=Hours worked* Rate per hour + (Time take / time allowed) * Time saved *
Rate per hour.
= 40 * 20 + (40 / 48) * 8 * 20.
= 800 + (0.83) * 8 * 20.
= 800 + 132.8
= 933.