Piece Rate – NBC Institute

IMAC – MAR 2023 – L1 – Q4 – Accounting for Inventory and Labour | Standard Costing and Variance Analysis

Discuss tasks suitable for piece rate and hourly rate payment systems and compute labor variances and standard costing variances.

Question

a) Employees may be paid either using piece rate or hourly rate.

Required:
In reference to the statement above, state THREE (3) tasks/jobs that:
i) Piece rate may be used. (3 marks)
ii) Hourly rate may be used. (3 marks)

b) Krenkren enterprise uses the hourly rate to pay her employees. The current rate is GH¢6 per hour. However, employees are paid 1.5 times for each overtime hour worked. Each employee is to work a minimum of 40 hours a week without a guaranteed payment. Any extra hour will attract overtime rate.

Extract from the time sheet for a week has been provided below:

Name	Staff Number	Hours worked
Kwame Sarfo	H 1356	56
John Addae	H 3456	38
Thomas Appia	F 2254	48
Rose Danso	F 8645	50

Required:
Calculate the basic pay for each of the staff. (9 marks)

c) The following standard costs apply to the manufacture of a product by Pontir Ltd:

Standard weight to produce one unit: 12 kgs
Standard price per kg: GH¢9
Standard hours to produce one unit: 10
Standard rate per hour: GH¢4

Actual production and costs for one accounting period were:

Cost Element	Actual Usage	Actual Cost (GH¢)
Material	3,770 kgs	35,815
Labour	2,755 hours	11,571

The actual output was 290 units.

Required:
Calculate relevant material and labor cost variances and present these in a format suitable for presentation to the management of Pontir Ltd. (5 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Hourly Rate, Labor Cost, Piece Rate, Standard Costing, Variance Analysis
Level: Level 1

Topic: Accounting for Inventory and Labour, Standard Costing and Variance Analysis
Series: MAR 2023

IMAC – NOV 2019 – L1 – Q4 – Accounting for Inventory and Labour

Calculate material variances, explain time and piece rate, and compute direct and indirect labour costs

Question

Walata Ltd manufactures and sells a unique anti-cold formula called the Magic Ball. The product is produced from a combination of two ingredients; R and Q with the following details:

Standard quantity per unit:

Q: 3kg
R: 2kg

Standard prices:

Q: GH¢2.50
R: GH¢4.00

For the quarter just ended, the following results were recorded:

Actual production: 2,000 units

Material	Quantity purchased and used	Price per Kilogramme
Q	4,800 kg	GH¢4.25
R	5,400 kg	GH¢2.20

Required:
i) Calculate the price variance for each material. (3 marks)
ii) Calculate the usage variance for each material. (3 marks)

b) Apagya Ltd has two product lines AB and CD. Time rate and piece rate labour rewarding systems are used for AB and CD products respectively.
Required:
Explain the terms time rate and piece rate, clearly outlining their differences and giving examples of business settings where each could be applied. (4 marks)

c) AB Ltd operates a 40-hour weekly work regime and rewards labour for all overtime worked at time and one-half.
The wage rate is GH¢80 per hour.
The following details are recorded for the month of October 2019 for an employee (Adamu):

Week	Hours Worked
1	36
2	48
3	45
4	46

Required:
i) Compute the total direct labour costs for Adamu for the month of October 2019. (4 marks)
ii) Calculate the total indirect labour costs for Adamu for the month of October 2019. (4 marks)

d) Explain the treatment of overtime premium in accounting for labour costs. (2 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Overtime Premium, Piece Rate, Price Variance, Time Rate, Usage Variance
Level: Level 1

Topic: Accounting for Inventory and Labour

IMAC – MAR 2023 – L1 – Q4 – Accounting for Inventory and Labour | Standard Costing and Variance Analysis

Discuss tasks suitable for piece rate and hourly rate payment systems and compute labor variances and standard costing variances.

Question

a) Employees may be paid either using piece rate or hourly rate.

Required:
In reference to the statement above, state THREE (3) tasks/jobs that:
i) Piece rate may be used. (3 marks)
ii) Hourly rate may be used. (3 marks)

Extract from the time sheet for a week has been provided below:

Name	Staff Number	Hours worked
Kwame Sarfo	H 1356	56
John Addae	H 3456	38
Thomas Appia	F 2254	48
Rose Danso	F 8645	50

Required:
Calculate the basic pay for each of the staff. (9 marks)

c) The following standard costs apply to the manufacture of a product by Pontir Ltd:

Standard weight to produce one unit: 12 kgs
Standard price per kg: GH¢9
Standard hours to produce one unit: 10
Standard rate per hour: GH¢4

Actual production and costs for one accounting period were:

Cost Element	Actual Usage	Actual Cost (GH¢)
Material	3,770 kgs	35,815
Labour	2,755 hours	11,571

The actual output was 290 units.

Required:
Calculate relevant material and labor cost variances and present these in a format suitable for presentation to the management of Pontir Ltd. (5 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Hourly Rate, Labor Cost, Piece Rate, Standard Costing, Variance Analysis
Level: Level 1

Topic: Accounting for Inventory and Labour, Standard Costing and Variance Analysis
Series: MAR 2023

IMAC – NOV 2019 – L1 – Q4 – Accounting for Inventory and Labour

Calculate material variances, explain time and piece rate, and compute direct and indirect labour costs

Question

Walata Ltd manufactures and sells a unique anti-cold formula called the Magic Ball. The product is produced from a combination of two ingredients; R and Q with the following details:

Standard quantity per unit:

Q: 3kg
R: 2kg

Standard prices:

Q: GH¢2.50
R: GH¢4.00

For the quarter just ended, the following results were recorded:

Actual production: 2,000 units

Material	Quantity purchased and used	Price per Kilogramme
Q	4,800 kg	GH¢4.25
R	5,400 kg	GH¢2.20

Required:
i) Calculate the price variance for each material. (3 marks)
ii) Calculate the usage variance for each material. (3 marks)

Week	Hours Worked
1	36
2	48
3	45
4	46

d) Explain the treatment of overtime premium in accounting for labour costs. (2 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Overtime Premium, Piece Rate, Price Variance, Time Rate, Usage Variance
Level: Level 1

Topic: Accounting for Inventory and Labour

Question Tag: Piece Rate

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IMAC – MAR 2023 – L1 – Q4 – Accounting for Inventory and Labour | Standard Costing and Variance Analysis

Discuss tasks suitable for piece rate and hourly rate payment systems and compute labor variances and standard costing variances.

IMAC – NOV 2019 – L1 – Q4 – Accounting for Inventory and Labour

Calculate material variances, explain time and piece rate, and compute direct and indirect labour costs

IMAC – MAR 2023 – L1 – Q4 – Accounting for Inventory and Labour | Standard Costing and Variance Analysis

Discuss tasks suitable for piece rate and hourly rate payment systems and compute labor variances and standard costing variances.

IMAC – NOV 2019 – L1 – Q4 – Accounting for Inventory and Labour

Calculate material variances, explain time and piece rate, and compute direct and indirect labour costs

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IMAC – MAR 2023 – L1 – Q4 – Accounting for Inventory and Labour | Standard Costing and Variance Analysis

Discuss tasks suitable for piece rate and hourly rate payment systems and compute labor variances and standard costing variances.

You're reporting an error for "IMAC – MAR 2023 – L1 – Q4 – Accounting for Inventory and Labour | Standard Costing and Variance Analysis"

IMAC – NOV 2019 – L1 – Q4 – Accounting for Inventory and Labour

Calculate material variances, explain time and piece rate, and compute direct and indirect labour costs

You're reporting an error for "IMAC – NOV 2019 – L1 – Q4 – Accounting for Inventory and Labour"

IMAC – MAR 2023 – L1 – Q4 – Accounting for Inventory and Labour | Standard Costing and Variance Analysis

Discuss tasks suitable for piece rate and hourly rate payment systems and compute labor variances and standard costing variances.

You're reporting an error for "IMAC – MAR 2023 – L1 – Q4 – Accounting for Inventory and Labour | Standard Costing and Variance Analysis"

IMAC – NOV 2019 – L1 – Q4 – Accounting for Inventory and Labour

Calculate material variances, explain time and piece rate, and compute direct and indirect labour costs

You're reporting an error for "IMAC – NOV 2019 – L1 – Q4 – Accounting for Inventory and Labour"

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