PPT - Piece Rate System B Com Notes | EduRev

Cost Accounting

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B Com : PPT - Piece Rate System B Com Notes | EduRev

 Page 1


2. Piece Rate System
? Under this system, the wages are paid to a worker on the 
basis of output produced by him without considering the time 
taken in performing the work.
? Wages = N * R
where N = no. of unit produced.
R = Rate per unit
? The earning of workers depends on the speed of the work and 
his own individual skills and efficiency.
Page 2


2. Piece Rate System
? Under this system, the wages are paid to a worker on the 
basis of output produced by him without considering the time 
taken in performing the work.
? Wages = N * R
where N = no. of unit produced.
R = Rate per unit
? The earning of workers depends on the speed of the work and 
his own individual skills and efficiency.
Advantages of Piece Rate System
? Works as an inducer for workers to produce more.
? Here reward is related to efforts.
? This method is fair to all as inefficient workers are panelized 
and efficient worker are rewarded.
Page 3


2. Piece Rate System
? Under this system, the wages are paid to a worker on the 
basis of output produced by him without considering the time 
taken in performing the work.
? Wages = N * R
where N = no. of unit produced.
R = Rate per unit
? The earning of workers depends on the speed of the work and 
his own individual skills and efficiency.
Advantages of Piece Rate System
? Works as an inducer for workers to produce more.
? Here reward is related to efforts.
? This method is fair to all as inefficient workers are panelized 
and efficient worker are rewarded.
Disadvantages of Piece Rate System
? In an effort to produce more and earn more workers may 
exert themselves to fatigue.
? Workers feels insecure in this system because they will lose 
wages for the period of absence.
? This system requires an up-to-date records of output produce 
by each workers which increase the clerical works. 
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