INTERNATIONAL ISLAMIC

UNIVERSITY ISLAMABAD
Cost Accounting

QUIZ # 03

NAME : RIMSHA HANIF

CLASS: BBAIT 36
ROLL # : 1395-FMS/BBAIT/F19
TOPIC : QUIZ # 03
SUBMITTED TO : MAM FAIZA
GULSHAN
QUESTION 1:Stephen Brothers pay to the filling machine operators under piece
rate system. Standard Daily wage of the worker performing filling operation is 500
dollars. Standard daily output is 500 pieces per worker. Output of worker during a
day is as follow:
• Ahmed………………..350 Pieces
• Hammad………………500 Pieces
• Umer………………….560 Pieces
You are Required to calculate the wages Earned by the worker under Piece Rate
Guaranteed day Rate
ANSWER:
PIECE RATE = standard day rate/standard daily output
= $ 500 /500
= $ 1 per unit
Wages earned = piece rate * standard daily output
Ahmed = $ 1* 350 = $ 350
Hammad = $ 1* 500 = $ 500
Umer = $ 1* 560 = $ 560

wages Earned by the worker under Piece Rate Guaranteed day Rate:
AHMED: Actual output is less than standard output. Ahmed will get wages at day rate as
$500.
HAMMAD: Actual out put is same as standard output .Hammad will get wages at day rate as
$ 500.
UMER: Actual output is more than standard output .then Umer will et wages at day rate as
500+(60*$1)= $ 560.
QUESTION 2: For an operation standard production time is calculated as 45
seconds per unit. Worker performing this operation are classified in the pay scale
of 864 dollars per day. Differential to be applied is as under:
• 70 percent of the standard piece rate for the below standard output.
• 110 percent of standard piece rate for at or above standard output.
During a day the output of the worker performing this operation is as given below.
Use Differential Piece Rate and find the earning of each worker.
Sara……………………………….700 Units
Nida……………………………….640 Units
Kanwal……………………………620 Units
Asma………………………………600 Units
ANSWER:
STANDARD OUTPUT PER DAY = ( 8 hours * 3600 seconds) /45 second per unit
= 640 units
Standard piece rate = standard wage per day /standard output per day
= $ 864/640
= $ 1.35 per unit
below standard output = 70% * $ 1.35 = $ 0.945
above standard output = 110 % * $ 1.35 = $ 1.485
NAME OF WORKER OUTPUT OF EARNING UNDER
WORKERS DIFFERENTIAL
PIECE RATE
RATE TOTAL
SARA 700 $ 1.485 $ 1039.5
NIDA 640 $ 1.485 $ 950.4
KANWAL 620 $ 0.945 $ 585.9
ASMA 600 $ 0.945 $ 567
 QUESTION 3:

Tri star football manufacturer determine the standard production time for stitching
of a football as 80 minutes. Worker engaged in this operation are classified in the
pay scale of 600 dollars per day of 8 hours. During a day output of the four worker
were given below. You are required to calculate the wage of the worker if 100
percent premium is paid for time saved.
• A…………..9 UNITS
• B…………..7 UNITS
• C…………..6 UNITS
• D…………..5 UNITS
ANSWER : wages
WORKERS UNITS HOURS STANDARD EXTRA REGULAR PREMIUM TOTAL
PRODUCED WORK HOURS HOURS $ $ $
A 9 12 8 4 $ 600 $ 300 $ 900
B 7 9.33 8 1.33 $ 600 $ 99.75 $ 699.75
C 6 8 8 0 $ 600 - $ 600
D 5 6.67 8 0 $ 600 - $ 600
HOURS WORKED = (unit produced * 80 minutes per unit) / 60 minute per hour
• A = 9* 80 / 60 = 12
• B = 7* 80/ 60 = 9.33
• C = 6* 80 / 60 = 8
• D = 5 * 80 / 60 = 6.67
EXTRA HOURS = HOUR WORK – STANDARD HOUR
• A = 12- 8 = 4
• B = 9.33 – 8 = 1.33
• C=8–8=0
• D=0
HOURLY RATE = $ 600 / 8 HOURS = $ 75
REGULAR EARNING = $ 75 * 8 hour work = $ 600
Premium = $ 75 * hour saved
• A= $ 75 * 4 = $ 300
• B = $ 75 * 1.33 = $ 99.75