Labour

Labour Turnover
Separation rate method= Number of Separations in a period X 100
Average Number of workers in a period

Replacement rate method = Number of Replacements in a period X 100

Average Number of workers in a period

Flux method= Number of Separations in a period+ Number of Replacements in a period X100

Average Number of workers in a period

Q1) The following information relates to the personnel department of a factory for the month of April, 1995:
Number of workers on April 1, 1995 950
Number of workers on April 30, 1995 1,050
Number of workers who quit the factory in April 10
Number of workers discharged in April 30
Number of workers engaged in April (including 120 on account of expansion scheme) 140
Calculate the labour turnover rate and equivalent annual rate under the different methods.
(C.A. Inter May,2001, B.com(H) , Delhi,2004)
Q2) The following information relates to work force in a factory duringthe year 2007-08.
Number of workers on April 1,07 2,350
Number of workers on March 31,08 2,850
Number of workers who quit on their own 200
Number of workers who availed golden handshake opportunity 100
Number of workers employed during 2007-08 including those
Employed due to expansion. 800
Calculate annual labour turnover rate and equivalent monthly turnover rate under different methods.
(B.com(H), Delhi,2004)

Q3) From the following data provided top you, find out the Labour Turnover Rate by applying:
i) Replacement Method
ii) Separation Method
Number of workers on the payroll:
At the beginning of the month- 500
At the end of the month - 600
During the month, 5 workers left, 20 workers were discharged and 75 workers were recruited. Of these, 10 workers recruited in the
vacancies of those leaving and while the rest were engaged for an expansion scheme.

Q4) from the following information calculate Labour turnover rate:

No. of workers as on 01.01.2000= 7,600
No. of workers as on 31.12.2000= 8,400
During the year, 80 workers left while 320 workers were discharged. 1,500 workers were recruited during the year of these, 300
workers were recruited because of exits and rest were recruited in accordance with expansion plans.
(C.A. Inter May,2011)
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Q5) The Cost Accountant of Tirupati Electronic Ltd. Has computed labour turnover rates for the quarter ending 31 March, 2008 as
10%, 5% and 3% respectively under ‘Flux method’ ‘Replacement method’ and ‘Separation method’. If the number of workers replaced
during that quarter is 30, find out the number of (i) workers recruited and joined and (ii) workers left and discharged.
(B.com(H), Delhi, 1998,2006)
Q6) From the following data calculate monthly labour turnover rate by (i) Separation method; (ii) Replacement method; and (iii) Flux
method.
No. of workers on pay roll:
At the beginning of month 700 and at the end of the month 800.
During the month 10 workers left, 30 were discharged and 140 were recruited. Of those recruited, 10 were replaced due to
expansion. (B.com(H), Delhi, 2007)

Incentive Plan
Halsey Premium plan
Total Earnings= T X R +(S - T) X R X 50% (30%)
Where
T=Time taken
R= Hourly Rate
S= Standard Time

Rowan Plan
Bonus- Time Saved X Time Taken X Hourly Rate
Standard Time
Total Earnings = Time Taken X Hourly Rate + Bonus

Q7) Standard time allocated for a job is 20 hours and the rate per hour is re. 1 plus dearness allowance @ 0.30 paise per hour
worked.
Actual time taken by a worker is 15 hours.
Calculate earnings under:
a) Time- wage system
b) Piece- wage system
c) Halsey plan
d) Rowan scheme.
(B.com(H),Delhi,2004)
Q8) From the following particulars, find the amount of cash required for payment of wages in a factory for a particular month:
1. Wages for normal hours worked 40,000
2. Overtime wages 10,500
3. Leave wages 5,000
4. Contribution to provided Fund:
Employee’s share 4,000
Employer’s share 3,500
5. House rent to be recovered from 10 employees @ Rs. 200 per month.
(B.com(H),Delhi,2005)
Q9) A worker is paid Rs. 50 per hour and the 5 days working week contains 42 hours. The daily allowance for approved absence from
his place of work, maintenance of machine etc. is 12 minutes and his job card shows that his time chargeable during the week to
various jobs is as follows:
 Job No. 305 20 hrs.
Job No. 310 10 hrs.
Job No. 320 8 hrs.
The unaccounted time is caused by a power failure. Show how his wages for the week would be dealt with in cost accounts.
(B.com(H), Delhi,2003)

Q10) XYZ Co. employs its workers for a single shift of 8 hours per day for 25 days in a month. The Company has recently fixed the
standard output of 40 units per day per worker for a mass production item and introduced an incentive scheme to boost output.
Details of wages payable to the workers are as follows:
(i) Basic wages : Rs. 3 per unit subject to a guaranteed minimum wages of Rs. 80 per day worked.
(ii) Dearness allowance : Rs. 40 per day worked.
(iii) Incentive bonus :
Upto 80% efficiency : Nil
For efficiency above 80% : Rs. 50 for every 1% increase above 80%.
The details of performance of 2 workers for a particular month are as follows:
Workers No. of days worked Output (units)
A 25 820
B 18 500
C 25 910
D 24 780
Calculate the total earnings of both the workers for the month. (B.com(H),Delhi,2004)

Q11) In a factory Ram and Sham produce the same product using the same input of same material and at the same normal wage rate.
Bonus is paid to both of them in the form of normal time wage rate adjusted by the proportion which time saved bears to the
standard time for the completion of the product. The time allotted to the product is fifty hours. Ram takes thirty hours and sham
takes forty hours to produce the product. The factory cost of the product for Ram is Rs. 3,100 and for Sham Rs. 3,280. The factory
overhead rate is Rs. 12 per hour.
Calculate (i) Normal Wage Rate; (ii) Cost of material used for the product; and (iii) the input of material if the unit material cost is Rs.
16. (B.com(H), Delhi.1997)

Q12) ‘X’, an employee of ABC Co. gets the following emoluments and benefits:
(i) Basic Pay Rs. 1,000 p.m.
(ii) Dearness Allowance Rs. 200 P.m.
(iii) Bonus 20% of salary and D.A.
(iv) Other allowances Rs. 250 p.m.
(v) Employee’s Contribution to P.F. 10% of salary and D.A.
‘X’ works for 2400 hours per annum. Out of which 400 hours are non-productive and treated as normal idle time. Find out the
effective hourly cost of employee ‘X’
(B.com(H), Delhi,2008)

Q13) A factory has a piece-work scheme for mass production of a certain component for a T.V. manufacturer.
The standard production fixed for a day of 8 hours is 40 units. The piece work rate is Rs. 4 per piece. The datails of remuneration
payable to the workers are as follows:
Production wages Dearness Allowance Incentive Bonus
Upto 80% Per week wages @ Rs. 60/day Nil
 efficiency Rs. 4 per piece subject
to guaranteed minimum
wages of Rs. 100/day
Above 80% -do- -do- Rs. 40/- for every 1%
increase in efficiency
above 80%
Three workers Ram, salim, Tom gave the following performance for May 2007:
Name of the worker No. of days worked Output (units)
Ram 20 480
Salim 24 864
Tom 25 1,100
Calculate their total earnings.
(I.C.W.A, Inter, Stage I, June 2007)

Q14) A worker under the Halsey method of remuneration has a day rate of Rs. 12 per week of 48 hours, plus a cost of living bonus of
10 paise per hour worked. He is given an 8 hour task to perform, which the accomplishes in 6 hours. He is allowed 30% of the times
saved as premium bonus. What would be his total hourly rate of earnings, and what difference would it make if he was paid und er
the Rowan mehod?

Q 15) A, an employee of XYZ Co. gets the following emoluments and benefits:
Salary Rs. 250 per month
Dearness Allowance:
st
On 1 Rs. 100 of salary Rs. 400
On next Rs. 100 of salary Rs. 100
On balance of every Rs. 100 Rs. 50 or part thereof
Employer’s contribution to
Provident Fund 8% of salary and D.A.
E.S.I 4% of salary and D.A.
Bonus 20% of salary and D.A.
Other allowances Rs. 2,725 per annum.
A works for 2,400 hours per annum, out of which 400 hours are non-productive but treated as normal idle time. A works for 18
effective hours on Job No. 15, where the cost of materials equals A’s earnings and the overheads applied are 100% of prime cost. The
sale value of the Job is quoted to earn a profit of 10% on such value.
(B.com(H), Delhi, 2009)
Q16) The three workers Govind, Ram and Shyam produced 80, 100 and 120 pieces of a product X on a particular day in May 2009 in a
factory. The time allowed for 10 units of product X is 1 hour and their hourly rate is Rs. 4.
Calculate for each of these three workers the following:
(i) Earnings for the day
(ii) Effective rate of earnings per hour under:
(a) Straight piece-rate plan
(b) Halsey premium bonus plan (50% sharing)
(c) Rowan premium bonus plan of labour remuneration.
(B.com(H), Delhi, 2010)