JUNE 2018

Question 3

(a) Explain any three ways in which employees can commit payroll fraud and how to
overcome it.
(6 marks)
(b) Spark Wiring Company Ltd (SWCL) deals in repairs of electric equipment in customers’
homes. The following information relates the period ended 31 December, 2017:
Sales recorded were Shs 18,500,000,000 and the PV ratio was 30%.
Due to labour turnover, 900 productive hours were lost.
The actual labour hours worked were 8,000 which include 600 hours attributed to
training new staff.

The costs incurred due to labour turnover were:

Shs ‘000’
Recruitment 12,040
Training 7,800
Selection 3,600
Settlement of new staff 60,000

Furthermore, the company’s records revealed the following:

Standard time 15 hours

Time taken 9 hours
Hourly rate Shs 25,000

Required:

(i) Calculate the profit lost as a result of labour turnover for the year ended 31
December, 2017.
(8 marks)
(ii) Calculate the total earnings of a worker under the Halsey premium and Rowan
plans.
(4 marks)
(iii) Advise SWCL on the bonus scheme to adopt in order to motivate the workers.
 (2 mark)
(Total 20 marks)

DEC 2017
Question 3

(a) Distinguish between job analysis and job evaluation. (2 marks)

(b) (i) Define the term job remuneration. (1 mark)
(ii) Identify any two basic remuneration approaches. (2 marks)
(iii) For each remuneration approaches in (b) (ii), explain its two
demerits. (4 marks)
(c) Pondo Ltd currently remunerates
its factory workers on a time
basis. The company is
considering the introduction of
alternative methods of
remuneration and the following
information relates to four
employees for one week:
Employee
Kenneth Julia Bob Ben
Hours worked 15 10 12 15
Rate of pay per hour (Shs) 15,000 15,000 20,000 20,000
Units of output
150 100 100 100

The time allowed for each unit of output is 10 standard minutes and, for purposes
of piecework calculations, each minute is valued at Shs 50.

Required:

Calculate the earnings of each employee, where earnings are based on:

(i) piece work rates with earnings guarantee at 80% of pay calculated on an
hourly basis. (4 marks)
(ii) premium bonus scheme in which bonus (based on 75% of time saved) is
added to pay calculated on an hourly basis. (7 marks)
(Total 20 marks)
 DEC 2016
5(b) Zeri Limited deals in the production of two brands of soft drinks code
named K and M and produces 500 litres of K and 380 litres of M per hour.

The budgeted production for the month of October, 2016 was 15,000 litres
and 11,000 litres while the actual production was 18,000 litres and 13,000
litres of K and M respectively. The total time of production was 90 hours.

Required:

Calculate the following control ratios:

(i) Capacity. (3 marks)

(ii) Efficiency. (3 marks)
(iii) Activity. (3 marks)

AUG 2016
Question 2

(a) Distinguish between:

(i) estimated and standard costs. (2 marks)
(ii) administrative and selling costs. (2 marks)
(b) Describe the following costs, giving an example of each:
(i) avoidable costs. (2 marks)
(ii) sunk costs. (2 marks)
(c) Ample Fitness Ltd (AFL) manufactures two types of tread mills, a mechanical
model and an automatic model, to be used in gyms in Kampala. The
following information relates to manufacturing operations for the period
ended 31 July, 2016.
Shs ‘000’ Sales 1,100,000
Inventories at the beginning of the period:
Finished goods 28,000
Work in progress 16,000 Purchases of materials 440,000
Materials inventory:
At the beginning of the period 12,000
At the end of the period 16,000
 Direct labour 260,000
Factory overhead at 45% of direct labour cost
Inventories at end of the period:
Work in progress 24,000
Finished goods 32,000

Other expenses for the period:

Selling expenses 10% of sales.
Administration expenses 10% of sales.

Required:

Prepare, for the period ended 31 July, 2016 for AFL a statement of:
(i) cost. (7 marks)
(ii) profit or loss. (5 marks)

(Total 20 marks)

Question 6

(a) Explain:

(i) the difference between job evaluation and job analysis (2 marks)
(ii) any three methods used in job evaluation (6 marks)

(b) (i) Describe the Halsey remuneration plan and explain any one of its
features.
(2 marks)
(ii) Explain any two merits and any two demerits of the Halsey
remuneration plan.
(4 marks)
(c) Metals Ltd pays its machine operator an ordinary rate of Shs 5,000 per 8
hours in a day. The standard output for the machine is fixed at 800 pieces
per hour. On a certain day, output of the machine is 8,000 pieces.
Required:

Using the Halsey premium plan, calculate the:

(i) wage for the machine operator. (4 marks)

(ii) labour cost per 1,000 pieces. (2 marks)
(Total 20 marks)