Calculate the Earnings of Worker Mahesh and Worker Rupesh under Straig...
Standard Time per unit: 30 seconds
Normal Rate per hour: Rs 18
Differential Rate:
a) 80% of piece rate below standard
b) 120% of piece rate at or above standard
Worker Mahesh:
Units produced per day: 1100
Number of hours worked per day: 8
Calculation of Earnings under Straight Piece Rate System:
Under the Straight Piece Rate System, the worker is paid a fixed rate per unit produced.
Earnings per unit = Normal Rate per hour / Standard Time per unit
= Rs 18 / (30 seconds / 3600 seconds per hour)
= Rs 18 / 0.00833
= Rs 2160
Total earnings under Straight Piece Rate System = Earnings per unit * Units produced per day
= Rs 2160 * 1100
= Rs 2,376,000
Calculation of Earnings under Taylor’s Differential Piece Rate System:
Under Taylor’s Differential Piece Rate System, the worker is paid different rates for units produced below or at/above the standard time.
For units produced below standard time:
Earnings per unit = Earnings per unit under Straight Piece Rate System * 80%
= Rs 2160 * 0.8
= Rs 1728
For units produced at/above standard time:
Earnings per unit = Earnings per unit under Straight Piece Rate System * 120%
= Rs 2160 * 1.2
= Rs 2592
Total earnings under Taylor’s Differential Piece Rate System = (Earnings per unit for units below standard time * Number of units produced below standard time) + (Earnings per unit for units at/above standard time * Number of units produced at/above standard time)
= (Rs 1728 * 200) + (Rs 2592 * 900)
= Rs 345,600 + Rs 2,332,800
= Rs 2,678,400
Worker Rupesh:
Units produced per day: 900
Number of hours worked per day: 8
Calculation of Earnings under Straight Piece Rate System:
Earnings per unit = Rs 2160 (same as Mahesh's case)
Total earnings under Straight Piece Rate System = Rs 2160 * 900
= Rs 1,944,000
Calculation of Earnings under Taylor’s Differential Piece Rate System:
Total earnings under Taylor’s Differential Piece Rate System = (Rs 1728 * 0) + (Rs 2592 * 900)
= Rs 0 + Rs 2,332,800
= Rs 2,332,800
Summary:
- Worker Mahesh's earnings under Straight Piece Rate System = Rs 2,376,000
- Worker Mahesh's earnings under Taylor’s Differential Piece Rate System = Rs 2,678,400
- Worker Rupesh's earnings under Straight Piece Rate System = Rs 1,944,000
- Worker Rupesh's earnings under Taylor’s Differential Piece Rate System = Rs 2,332,800
Under the Straight Piece Rate System, workers are paid a fixed rate per unit produced, resulting in lower earnings compared to Taylor’s Differential Piece Rate
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