APEL’s costing department is in the process of determining salaries and wages for December 2022. The following information is available for four workers: Activity Kalombo Sitali Chigangu Muleya Actual units produced 350 units 600 Units 500 Units 450 Actual hours worked 60 Hours 45 Hours 48 Hours 55 hours Wage rate per hour K10 K12 K15 K11.5 Expected work hours 50 Hours 50 Hours 50 Hours 50 Over time paid @ Time and half Time and half Time and half Time and half The standard time per unit for each worker is 12 minutes and the bonus is paid at 60% of time saved. Required: Calculate the total pay for each of the employees clearly showing the bonus pay, overtime premium and basic wage figures. Explain the advantages and disadvantages of group bonus schemes.
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
APEL’s costing department is in the process of determining salaries and wages for December 2022. The following information is available for four workers:
|
Activity |
Kalombo |
Sitali |
Chigangu |
Muleya |
|
Actual units produced |
350 units |
600 Units |
500 Units |
450 |
|
Actual hours worked |
60 Hours |
45 Hours |
48 Hours |
55 hours |
|
Wage rate per hour |
K10 |
K12 |
K15 |
K11.5 |
|
Expected work hours |
50 Hours |
50 Hours |
50 Hours |
50 |
|
Over time paid @ |
Time and half |
Time and half |
Time and half |
Time and half |
The standard time per unit for each worker is 12 minutes and the bonus is paid at 60% of time saved.
Required:
- Calculate the total pay for each of the employees clearly showing the bonus pay, overtime premium and basic wage figures.
- Explain the advantages and disadvantages of group bonus schemes.
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