$50 wages. Output is again 200 units and overhead charges are increased by $100.
［2002_dec Section A _20］There would be an increase in the total cost for labour as a result of: (i) additional labour being employed on a temporary basis. (ii) a department with spare capacity being made to work more hours. (iii) a department which is at full capacity switching from the production of one product to another. Which of the above is/are correct? A (i) only B (ii) only C (iii) only D (i) and (iii) only
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［Answer］A
1.4 Effect of automation on productivity
Rising wage rates have increased automation, which in turn has improved productivity and reduced costs. Where automation is introduced, productivity is often, but misleadingly, measured in terms of output per man-hour. A new measure of productivity is required, that is output per machine hour.
Example:
Suppose, for example, that a work-team of six men (240 hours per week) is replaced by one machine (40 hours per week) and a team of four men (160 hours per week), and as a result output is increased from 1,200 units per week to 1,600 units.
2. Remuneration policies
2.1 Effect of labour remuneration policies
a) The morale and efficiency of employees
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b) The cost of finished goods and services
2.2 Time work (day-rate system)
Employees are paid a basic rate per hour, day or week irrespective of production achieved.
Wages = Hours worked × rate of pay per hour
If an employee works for more hours than the basic daily requirement he may be entitled to an overtime payment.
If an employee works unsocial hours he may be entitled to a shift premium.
Summary of day-rate system a) They are easy to understand. b) They do not lead to very complex negotiations when they are being revised.
c) They are most appropriate when the quality of output is more important than the quantity, or where there is no basis for payment by performance. d) Basic time rate provides no incentive to improve productivity and close supervision is necessary, thus bonuses or commissions are often paid to
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encourage efficient and effective working.
Its effect on the cost per unit
［1-2_pilotpaper Section A _22］Scaynes employs two types of labour: skilled workers, considered to be direct workers, and semi-skilled workers, considered to be indirect workers. Skilled workers are paid ￡10 per hour and semi-skilled ￡6 per hour.
The skilled workers have worked 30 hours overtime this week, 10 hours on a specific order and 20 hours on general overtime. Overtime is paid at a rate of time and a half.
The semi-skilled workers have worked 45 hours overtime, 15 hours for a specific order at a customer’s request and the rest for general purposes. Overtime again is paid at time and a half.
What would be the total overtime pay considered to be a direct cost for this week? A ￡195 B ￡285 C ￡350
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D ￡485
［Answer］D
DirectcostSkilled workersSpecific overtime(10 × ￡10 × 1.5)General overtime(20 × ￡10 × 0.5)Semi-skilledSpecific overtimeGeneral overtime
2.3 Piecework schemes
Indirectcost150200100135485270370 Under this method, a fixed amount is paid per unit of output achieved, irrespective of time spent.
Wages=Units produced × Rate of pay per unit
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