Management accounting Cost Accounting b

By Joel Grant,2014-05-17 09:22
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Management accounting Cost Accounting b



    Method of Remuneration:

1) Time Rate system

     a) Flat time Rate

     b) High wage system

     c) Graduated time rate

2) Payment by Results

     a) Piece rate system

     i) Straight piece rate

     ii) Differential piece rate

    ? Taylor system

    ? Merrick system

    b) Group Bonus System

     i) Budgeted Expenses

     ii) Towne gain sharing scheme

     iii) Cost efficiency bonus

     iv) Priest man system

    c) Combination of Time and Piece rate

     i) Gantt task and Bonus scheme

     ii) Emerson Efficiency system

     iii) Point scheme

    ? Bedaux system

    ? Haynes manit system

    d) Premium bonus plans

     i) Halsey premium plan

     ii) Halsey weir premium plan

    iii) Rowan scheme

     iv) Barth scheme

     v) Accelerating premium bonus scheme

    e) Other incentive schemes

     i) Indirect monetary incentive

    ? Profit sharing

    ? Co-partnership

    ii) Non-Monetary Incentive


1) Time rate system = Hours worked * Rate per hour (Basic wages)

2) Piece rate system:

     i) Straight piece rate earnings = Number of units produced * Rate per unit

     ii) Differential Piece rate

    a) F.W.Taylor’s differential rate system

     ? 83% of piece rate when below standard

     ? 125% of piece rate when above or at standard

    b) Merrick differential or multiple piece rate system

    Efficiency level Piece rate

    ? up to 83% ?Normal piece rate

    ? 83% to 100% ? 110% of Normal rate

     ? Above 100% ? 120% of Normal rate

     iii) Gantt Task and Bonus system

     Output Payment

     ? Below standard ? Time rate (guaranteed)

     ? At standard ? 20% Bonus of Time rate

     ? Above standard ? 120% of ordinary piece rate

     iv) Emerson’s Efficiency system

     Efficiency Payment

     ? Below 66.7% ? Hourly Rate

     ? from 66.7% ? Hourly rate (+) increasing bonus according to degree

     to 100% of efficiency on the basis of step bonus rates

     ? Above 100% ? Hourly rate (+) 20% Bonus (+) additional bonus of 1%

     of hourly rate for every 1% increase in efficiency

     v) Halsey Premium Plan = Basic wages + 50% of time saved * Hourly Rate

     vi) Halsey Weir Premium Plan = Basic wages + 30% of time saved * Hourly rate

     vii) Rowan Plan = Basic wages + Time saved * Basic Wages

     Time allowed


     viii) Bedaus Point system = Basic wages + 75% * Bedaus point/60 * Rate/hr

     ix) Barth’s System = Hourly rate * ?Std time *Time taken

Labour Turnover:-

    1) Separation rate method = Separation during the period

     Average No. of worker’s during the period

2) Net labour T.O rate (or) Replacement method

     = Number of replacements

     Average No. of worker’s during the period

    3) Labour flux rate = No. of separation + No. of replacement

     Average No. of worker’s during the period

Accounting Treatment

1) Normal Idle time = Charged to factory overheads

2) Normal but un-controllable = It should be charged to job by inflating wage rate.

3) Abnormal = It should be charged to costing P & L a/c

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