Standard time allowed for job is 20 hours and the rate/ hour is Rs.1 and actual hours worked is 15 hours. Calculate earnings under Rowan plan.

INTRODUCTION TO COST ACCOUNTING

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

A	Rs. 17.50
B	Rs. 18.75
C	Rs. 15
D	Rs. 20

Explanation:

Detailed explanation-1: -Rowan System advocates for computing the bonus as a proportion of the wages of time taken. In other words, bonus payment is based on that proportion of the time wages which the time saved bears to the standard time.

Detailed explanation-2: -In the Rowan Plan, the quality of work does not suffer much. The worker is not induced to rush through the work because bonus increases at a decreasing rate at higher levels of efficiency. In the Halsey Plan, a worker is induced to rush through the work because he gets extra wages for every 50% of the time saved.

Detailed explanation-3: -Rowan plan is a incentive wage plan that was made by James rowan. It is a bonus incentive plan. Total wage = Time taken x time rate + time saved / time allowed x time taken x time rate.

There is 1 question to complete.