Answer to Question #261242 in Financial Math for JAMES

Question

Halwings Company Ltd who manufactures and retails products A, B and C employ sixty direct workers who work under a group of bonus scheme. The company engages three grades of workers who are paid a bonus of the excess of time allowed over time taken. The bonus paid is 75% of the workers‘ base rate and is shared by the workers in proportion to the time spent on the work. The following production data has been extracted from the company‘s records for April 2000.                               

                                                                                               

Product

Units produced

Time allowed per unit

A

320

63

B

640

120

C

1200

100

 

 

Grade of worker

Number of direct workers

Base rate per hour (sh)

Hours worked per worker

1

20

30

30

2

8

27

64

3

32

24

50

 

Required:

a) Percentage of hours saved to hours taken.                                                        (6 marks)

b) Bonus due to the group.                                                                                   (7 marks)

c) Gross earnings due to the group.                                                                      (7 marks)                                                                                                           

Answer 1

a)

Percentage of hours saved to hours taken.

=(Hours worked)/ (Actual number of hours in the pay period)*100

For Product A;

Percentage of hours saved to hours taken=

=(30/63)*100

=47.62%

Product B;

Percentage of hours saved to hours taken=

=(64/120)* 100

=53.33%

Product C;

=(50/100)*100

=50%

b)

Bonus due to the group.

    Product A;

=(Employee's salary)*(Bonus percentage)

(30hours*4weeks)*(75%)

(120)*(0.75)

=$90

Product B;

(27hours*4weeks)*(0.75)

=$81

Product C;

(50hours*4weeks)*(0.75)

=(200*0.75)

=$150

c)

Gross earnings due to the group.

Gross Earning = Total Revenue – Cost of Goods Sold

Product A;

(20160 - 14440)

=$5720

Product B;

(76800-40960)

=$35840

Product C;

(120000 - 60000)

= $60000