Cost accounting-labour costing,different remuneration
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Transcript of Cost accounting-labour costing,different remuneration
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POWER POINT PRESENTATION ON COST ACCOUNTING
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GROUP MEMBERS ABHSHEK-66 AKANCHHA-68 RAJ RAYMOND-92 SHYMAL MAJUMDAR-102 RAVI KUMAR-108
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TOPICLabour costing, different remuneration systems and incentives plans.
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CONTENTS• Introduction• Time rate system• Piece rate system• Incentive plans• HALSEY PREMIUM PLAN• PIECE WAGE SYSTEM• ROWAN PREMIUM PLAN
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INTRODUCTION OF LABOUR COSTING The cost of wages paid to workers
during an accounting period on daily,weekly,monthly,or job, basis, plus payroll and related taxes and benefits.
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METHOD OF REMUNERATION
Time rate system Piece wage system Incentive plans
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TIME RATE SYSTEM Under this system of wages payment, workers
are paid according to the time for which they work. Payment may be on hourly basis, weakly basis, or monthly basis.
Wages= No. of hours worked ×Rate per hour
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ADVANTAGES OF TIME RATE SYSTEM Simplicity Security to workers Quality of work Accepted by trade unions Unity in labour
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DISADVANTAGES OF TIME RATE SYSTEM Lack of incentive Lower production More supervision Idle time Costing difficulties
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PIECE WAGE SYSTEM Under this method, workers are paid in
proportion to the work done by them. The rate is fixed per unit of output, per article, per commodity, etc. the worker is paid for the total units manufactured.
Total earning= Units manufactured ×Rate per unit
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ADVANTAGES OF PIECE WAGE SYSTEM Incentive to efficient worker Increase in production Decrease in production Equitable wages Simple and easy
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DISADVANTAGES OF PIECE WAGES SYSTEM Lack of secured wages Inferior quality of the product Injurious to health of workers Unsuitable in certain cases Difficulties in fixing piece rate
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INCENTIVE PLANS It induce a worker to produce more to earn a higher
wages. Naturally, producing more in the same period of time should result in higher wages for the worker .
The primary purpose of an incentive plan is to induce a worker to produce more to earn a higher wages.
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ADVANTAGES OF INCENTIVE PLANS Motivation Increased earning Loyalty Reduced turnover Collaborative efforts
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DISADVANTAGES OF INCENTIVE PLANS Cash bonuses Non-cash incentive Group incentives Commission
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HALSEY PREMIUM PLAN It is a simple combination of time and piece rate
systems. A worker is paid a guaranteed base rate and is rewarded when his performance exceeds standard.
The total wages payable is calculated as under: =(hourly rate × time taken)+(50% ×time saved ×hourly rate)
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ADVANTAGES OF HALSEY PREMIUM PLAN Simple Efficient worker Shares benefits Minimum base-wage
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DISADVANTAGES OF HALSEY PREMIUM PLAN
Quality suffers Fixed bonus
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ROWAN PREMIUM PLAN
A standard time is established in respect of each job or process. There is a guaranteed base rate.
The total wages payable is calculated as under: =(hourly rate × time taken)+(time saved × time taken)× hourly rate time allowed
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ADVANTAGES OF ROWAN PREMIUM PLAN Minimum wage to worker Protect the employer Gain arising Reduction in labour
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DISADVANTAGES OF ROWAN PREMIUM PLAN Not understandable Not easy to operate Incentive given to workers Time saved
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TAYLOR’S DIFFERENTIAL PIECE RATE SYSTEMThis system was introduced by F. W. TAYLOR ,the father of scientific management. ADVANTAGES• Incentive to efficient workers. DISADVANTAGES• Not guarantee minimum wages• Wide discrimination between efficient and inefficient
workers.
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CONCOLUTIONThis topic is tell about how remuneration is calculated and accounted for: REMUNERATION METHODLABOUR COST CAN ARISE FROM;• Bonuses • Holiday pay• Sick pay• Payroll taxes
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THANK YOU