Gantt Task Systems | Accounting for Labour | Wages for Premium Plan

 

 

 

Accounting for Premium Plan | What is the Premium Plan in Accounting for Labour

Premium plan is also called incentive wage system and bonus plan system.

Time and piece wages system have their own advantage and disadvantage.

By the disadvantage of them, this incentive wage system has been developed.

It is developed to provide financial benefits to skilled workers and workers are separated as skilled and unskilled.

Some common features of this system are:

·          Time wages are guaranteed

·          As production increase, labour remuneration also increases; but not in proportion of output.

·          As efficiency increase, wage cost per unit reduces.

 

Under this plan, various plans have been developed.

Among them, the popular plans or systems are as follow:

Halsey Premium Plan

Rowan Plan

Taylor Plan

Gantt Task Plan

Priestman’s Plan

Scanlon’s Plan

 

 

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Gantt Task Systems

This is the combination of Halsey and Rowan premium system.

Under this system, minimum wages is guaranteed.

It protects average workers by providing time rate wages.

Efficient worker gets 20% bonus for standard work.

This system is also known progressive rate system.

There are three alternatives:

 

Output below standard	Standard production x Piece rate
Output equal standard	Production units x Time rate @ 120%
Output above standard	Production units x Piece rate@120% [or given in the question]

 

Keep in Mind (KIM)

If any worker produces less than standard output, he/she will receive minimum guarantee wages

Total wage = Standard production x Piece rate

 

 

Advantage of Gantt task system

The main advantages of Gantt task system are:

·          It ensures guaranteed time wage to workers who are below average workers.

·          This system encourages to improve their production level.

·          This system is very useful in job involve activities.

·          As production increases, cost per unit decreases.

 

Disadvantage of Gantt task system

The main disadvantages of Gantt task system are:

Minimum wage is guaranteed if worker produced less than standard production.

It is not good for the worker who produces standard output.

This system is not accepted by labour union because it brings dis-unity between workers.

 

 

 

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Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = Br = P = Birr = Currency of your country 

PROBLEM: 7A

The extracted date is given below related to Gantt task system:

Standard production per month (30 days)    2,000 units

Wage rate per unit $3

Units produced by workers:

A         1,900 units

B          2,100 units

Required: Earning under Gantt task bonus scheme

[Answer: A = $6,000; B = $7,560]

SOLUTION

Worker A = 1,900 units 

It is less than standard production. Bonus is not allowed.

He will receive minimum guarantee wages.

Total earning          

= 2000 units x $3  

= $6,000

 

Worker B = 2,100 units

It is more than standard production.

He will receive 20% bonus on piece rate.

Total earning          

= 2,100 units x $3 @ 120%

= 2,100 units x $3.60

= $7,560

 

 

 

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Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = Br = P = Birr = Currency of your country 

PROBLEM: 7B

The extracted date is given below related to Gantt task system:

Standard production per day		80 units
Standard working time per day		8 hours
Wage rate per hour		$28
Above standard output wage rate per unit		Rs 3.50
Units produced by workers:
Anjana	75 units
Binita	80 units
Chanda	90 units

Required: Earning per day under Gantt task bonus scheme

 [Answer: Anjana = $224; Binita = $269; Chanda = $315]

Solution:

Given and working note: 

Standard output per hour                  = 80 units ÷ 8 hours   = 10 units

Standard piece rate per unit              = $28 ÷ 10 units          = $2.80

 

 

Anjana = 75 units
It is less than standard production. Bonus is not allowed.
She will receive minimum guarantee wages.
Total earning		= 80 units x $2.80
		= $224
Binita  = 80 units
It is equal to standard production.
She will receive 20% bonus on piece rate.
Total earning	= 80 units x $2.80 @ 120%
	= 80 units x $3.36
	= $268.8 or $269
Chanda  = 90 units
It is more than standard production.
She will receive Rs 3.50 per unit
Total earning		= 90 units x $3.50
		= $315

 

 

#####

Problems  and  Answers  of  Gantt  Task  System

 

Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = Br = P = Birr = Currency of your country 

PROBLEM: 7A

The extracted date is given below related to Gantt task system:

Standard production per day        80 units

Standard working time per day    8 hours

Wage rate per hour                          $32

Above standard output wage rate per unit    $3.80

Units produced by workers:

Workers	A	B	C
Produced units	75	80	100

Required: Earning per day under Gantt task bonus scheme

 [Answer: A = $240; B = $307.20; C = $380;

* Standard piece rate = $32 ÷ 10 units = $3.20]

 

Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = Br = P = Birr = Currency of your country 

PROBLEM: 7B

The time cards of two workers working in a factory for 100 hours reported the following details:

Workers	Output in units
Mr. A	1,200
Miss X	900

The pre-fixed standard for one unit of output is 6 minutes. The prevailing wage rate per hour is $57

Required: Under Gant’s task Bonus System: (a) Wage rate per unit; (b) Wages earned by the workers Mr. A and Miss X

 [Answer: WRPU = $5.70; Total wage: A = $8,208; X = $5,700]

 

 

Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = Br = P = Birr = Currency of your country 

PROBLEM: 7C

The following are the particular applicable to a work progress:

Time rate guaranteed	$50 per hour
Standard output	10 units per hour
Piece rate above high task	$6.40
Working hour per day	8 hours

Produced by the semi-skilled workers:

Workers	Anjana	Ranjana	Sanjana
Produced units	70	80	85

Required: Wages of the workers under Gantt’s task bonus plan

 [Answer:  A = $400; R = $480; S = $544]

 

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