MAF151

TUTORIAL LABOUR 2

QUESTION 4

Shima Manufacturing produces pots that can be sold in local market. There are three
(3) workers working for the company. The normal working hours for the company is 8
hours daily. All of the workers are paid based on piecework rate. The piecework price is
RM0.10 per minute and the time allowed to produce 1 unit is 3 minutes.

In ensuring the effectiveness of the workers, the company also gives them bonus based
on time saved by the worker. Bonus is being paid at 75% of time saved based on the
hourly pay. The rate per hour is RM5.50.

Required:

Below are the level of output produced in one (1) day:

i) 80 units
ii) 120 units
iii) 210 units

Calculate earnings for each level of output as stated above:

a) Based on piecework, where earnings are guaranteed at 80% of time-based pay.

b) Based on bonus system.

SOLUTIONS

a) Based on piecework system:

Output level 80 units 120 units 210 units
Guaranteed earnings (80%)
(8 hrs x RM5.50 x 80%) RM35.20 RM35.20 RM35.20
Piecework earnings at
(RM0.10 x 3 mins)
=RM0.30 per unit x 80 units  RM24
=RM0.30 per unit x 120 units  RM36
=RM0.30 per unit x 210 units 
RM63
Wages payment RM35.20 RM36 RM63

b) Bonus system:
Output level 80 units 120 units 210 units
Timed allowed (3 mins x 80 units) (3 mins x 120 units) (3 mins x 210 units) /
/ 60 mins / 60 mins 60 mins
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4 hours 6 hours 10.5 hours

Time taken 8 hours 8 hours 8 hours
Time saved - - 2.5 hours
Bonus payment 75% x 2.5 hours x
RM5.50
=RM10.31

QUESTION 5
You are being employed as an Account Officer in charge of payroll by Setiakawan Bhd, a food
manufacturing company. The company operates 5 days in a week and the standard working
hours per day are 8 hours. The Operation Manager provides you with the following
information for the first week of January 2008.

Semi-skilled Workers Skilled worker

Hisham Faizal Ramdan
Actual hours worked 44 40 44
Hourly rate (RM) 3 3 6
Output (pack) : Twiggies 50 60 -
Frosties 40 40 30
Milokrunch 55 60 50

The standard time allowed for each pack is as follows:

Output Standard
time/pack
Twiggies 5 minutes
Frosties 8 minutes
Milokrunch 10 minutes

Hisham and Faizal are paid based on hourly basis. Overtime rate is one and a half for the first
two hours and double for the next hours. Ramdan is paid based on output produced.

Required:
a. Calculate the gross wages payable to each of the worker.
b. Explain what is idle time and give two reasons for idle time.

SOLUTIONS
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a. Wages payable to Hisham:

Hisham is payable on hourly basis and also can claim overtime. So his wages:
= Basic wages + OT pay

Basic wages = 40 hrs x RM 3 = RM 120

OT hours = 44 – 40 = 4 hours

OT pay = 2 hours x RM 3.00 x 1.5 = RM 9.00

= 2 hours x RM 3.00 x 2 = RM 12

Wages for Hisham = RM 120 + RM 9 + RM 12 = RM 141

Wages payable to Faizal:

Faizal is payable on hourly basis, but cannot claim overtime because no overtime
hours. So his wages:
= Basic wages

Basic wages = 40 hrs x RM 3 = RM 120

Wages payable to Ramdan:

Ramdan is payable based on output produced. So his wages:
= units produced x rate per unit

You are given the standard time per unit for each output, so all the output need to be
multiplied by the standard time so that they become the total minutes and then
divided by 60 minutes to become total hours. Later the total hours will be multiplied
with the hourly rate to determine the wages.

Thus, Ramdan’s wages = units produced x rate per unit

= output x standard time per unit x rate per hour

60 minutes

Frosties = 30 x 8 minutes / 60 minutes = 4 hrs

Milokrunch = 50 x 10 minutes / 60 minutes = 8.333 hrs___

Total = 12.333 hrs

x RM 6___

= RM 74.00_
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b. Idle time is unproductive time when there is no production made. Two reasons
for idle time are machine breakdown and power failure.

Question 6

The Assembly Department of Jubin Berhad employs three workers, with normal working hours
of 40 hours a week. Arni is paid on hourly basis. Badrul and Balkis are paid on a straight
piecework and differential piecework respectively.
The results for the employees for the last week of December are as follows:
Employees Hours Worked Units Assembled Rate
RM
Arni 50 200 15 / hour
Badrul 38 400 1.20 / unit
Balkis 40 357 See note iii

Additional information:

i. Overtime rate for Arni is one and a half of normal rate.

ii. Badrul and Balkis are paid a guaranteed amount of RM400/ week if the remuneration
on piecework falls below the guaranteed minimum.
iii. Unit rates for Balkis are:
RM
Units
0 – 100 - 1.00/unit
101 – 200 - 1.05/unit
201 – 250 - 1.10/unit
251 – 350 - 1.15/unit
351 – 400 - 1.20/unit

Required:

Calculate total wages earned by each worker.

Answer

Arni
Wages = Basic wages + overtime pay

Basic wages = 40 hrs x RM15

= RM600
Overtime pay
= OT hr x OT rate
= (50-40)hrs x 1.5 x RM15
=RM225
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Total wages = RM825

Badrul Balkis

Guaranteed minimum wages RM400; compare Guaranteed minimum wages RM400; compare
with piece rate wage. with differential piece rate wage.
Piece rate Wage: Differential Piece rate Wage =
= Units assembled x rate per unit 100 x RM1.00= RM 100
= 400 x RM1.20 100 x RM1.05= RM 105
= RM480 50 x RM1.10 = RM 55
100 x RM1.15 = RM115
thus wages paid to badrul is RM480. 7 x RM1.20 = RM8.40
Total = RM383.40

thus, wages paid to balkis is RM400 i.e.

minimum wage.