Taylor's method

Exercise:

Given that,

Standard output per hour=150 units

Hourly Labor Rate: Rs.10

Below standard level: 80% of standard piece rate

Above standard level =120 %of standard piece rate

Ans:

So standard output is = (150*8) =1200

Pay per unit= (10/150) = 0.067

Lower piece rate= 0.067*0.8= 0.054

Higher piece rate = 0.067*1.2 = 0.080

a) Earning when produces 1000 unit = 1000*0.054

=Rs.54

b) Earning when produces 1200 unit =1200*0.080

=Rs.104

Merrick Differential Piece Rate:

Exercise:
 Day Quantity produced

1 190

2 210

3 200

4 185

5 220

6 230

❖ Standard output per day of 8 hours’ work is 200 units and hourly rate is Rs.5.

Solution:

Standard Output per hour = 200/8

= 25 units

Basic Rate per Piece (per unit) = Rs.5/ 25 units

=Rs.0.20 per unit

Day Standard Actual Output Rate Day’s earning

Applicable
Output Output performance (quantity

1 200 190 190/200*100 Basic Rate (190*1.10*0.20)

(BR) + 10%
=95% =Rs.41.8
2 200 210 105% Basic Rate (210*1.20*0.20)
(BR) +20%
=Rs.50.4

3 200 200 100% BR+ 10% (200*1.10*0.20)

=Rs.44

4 200 185 92.5% BR+ 10% (195*1.10*0.20)

=Rs.42.9

5 200 220 110% BR+ 20% (220*1.20*0.20)

=Rs.52.8

6 200 230 115% BR+ 20% (230*1.20*0.20)

=Rs.55.2