COST ACCOUNTING
INTRODUCTION TO COST ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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More wages to workers under Rowan plan than Halsey plan
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More wages to workers under Halsey plan than Rowan plan
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Equal wages under two plans
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None of the above
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Detailed explanation-1: -Comparing Rowan plan and Halsey plan, it is seen that when the time saved is less than 50% of the standard time, Rowan plan allows more wages to a worker than Halsey plan.
Detailed explanation-2: -In the Halsey Plan, bonus is usually set at 50% of the time saved. It does not serve as a strong incentive. On the other hand under the Rowan Plan, bonus is that proportion of the wages of the time taken which the time saved bears to the standard time. It serves as a strong incentive for increasing the efficiency.
Detailed explanation-3: -Major Difference between Halsey and Rowan incentive plans: Bonus-Under Halsey plan, the bonus increases steadily with increase in efficiency. But in Rowan’s plan, the bonus increases up to a certain point and starts declining thereafter.
Detailed explanation-4: -A worker is entitled to get 50% of the wages of the time saved by him/her to complete the job against the time allowed to him/her to do the job under Halsey Premium Plan.
Detailed explanation-5: -Under Halsey plan, bonus is given for 50% of the time saved at the hourly rate. But under the Rowan plan, bonus is given for that portion of the time taken which time saved bears to the standard time at the hourly rate . 4.