Day Rate Scheme – Knowsia

ICMA – Nov 2024 – L1 – Q4b – Day-Rate Incentive Scheme Calculation

Calculates the cost per unit for both low and high day-rate incentive schemes.

Question

Amanda LTD – Day-Rate Incentive Scheme
Amanda LTD is a manufacturing company and its management is considering the introduction of a high day-rate incentive scheme. During one of such production periods, record shows that, if an employee makes 100 units in a 40-hour week, the employee is paid GH¢2 per hour, but if 120 units are made, the employee is paid GH¢2.50 per hour. Production overhead is added to cost at the rate of GH¢2 per direct labour hour.

Required:
i) What is the cost per unit for the low day-rate scheme?
ii) What is the cost per unit for the high day-rate scheme?

Answer

Find Related Questions by Tags, levels, etc.

Tags: Cost Calculation, Day Rate Scheme, Incentive Scheme
Level: Level 1

Topic: Marginal Costing and Absorption Costing
Series: Nov 2024

MA – May 2016 – L2 – Q4c – Relevant cost and revenue

Determine the cost per unit under different day rate schemes and assess the advisability of introducing a high day rate scheme.

Question

HK Manufacturing Company is considering introducing a high day rate incentive scheme. An experiment with one of its average workers showed that an employee is likely to produce 1,500 units in a 40-hour week if she was paid GH¢25 per hour, but 1,800 units if she was paid GH¢31.25 per hour.

Assume that production overhead is added to cost at the rate of GH¢25 per direct labour hour.

Required:

i) Determine the cost per unit of output under both the low day rate scheme and high day rate scheme.
(3 marks)

ii) Is it advisable to introduce the high day rate scheme?
(2 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Cost per Unit, Day Rate Scheme, Decision Making, Incentive Scheme
Level: Level 2

Topic: Relevant Cost and Revenue
Series: MAY 2016

ICMA – Nov 2024 – L1 – Q4b – Day-Rate Incentive Scheme Calculation

Calculates the cost per unit for both low and high day-rate incentive schemes.

Question

Required:
i) What is the cost per unit for the low day-rate scheme?
ii) What is the cost per unit for the high day-rate scheme?

Answer

Find Related Questions by Tags, levels, etc.

Tags: Cost Calculation, Day Rate Scheme, Incentive Scheme
Level: Level 1

Topic: Marginal Costing and Absorption Costing
Series: Nov 2024

MA – May 2016 – L2 – Q4c – Relevant cost and revenue

Determine the cost per unit under different day rate schemes and assess the advisability of introducing a high day rate scheme.

Question

Assume that production overhead is added to cost at the rate of GH¢25 per direct labour hour.

Required:

i) Determine the cost per unit of output under both the low day rate scheme and high day rate scheme.
(3 marks)

ii) Is it advisable to introduce the high day rate scheme?
(2 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Cost per Unit, Day Rate Scheme, Decision Making, Incentive Scheme
Level: Level 2

Topic: Relevant Cost and Revenue
Series: MAY 2016

Question Tag: Day Rate Scheme

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ICMA – Nov 2024 – L1 – Q4b – Day-Rate Incentive Scheme Calculation

Calculates the cost per unit for both low and high day-rate incentive schemes.

MA – May 2016 – L2 – Q4c – Relevant cost and revenue

Determine the cost per unit under different day rate schemes and assess the advisability of introducing a high day rate scheme.

ICMA – Nov 2024 – L1 – Q4b – Day-Rate Incentive Scheme Calculation

Calculates the cost per unit for both low and high day-rate incentive schemes.

MA – May 2016 – L2 – Q4c – Relevant cost and revenue

Determine the cost per unit under different day rate schemes and assess the advisability of introducing a high day rate scheme.

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Question Tag: Day Rate Scheme

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ICMA – Nov 2024 – L1 – Q4b – Day-Rate Incentive Scheme Calculation

Calculates the cost per unit for both low and high day-rate incentive schemes.

You're reporting an error for "ICMA – Nov 2024 – L1 – Q4b – Day-Rate Incentive Scheme Calculation"

MA – May 2016 – L2 – Q4c – Relevant cost and revenue

Determine the cost per unit under different day rate schemes and assess the advisability of introducing a high day rate scheme.

You're reporting an error for "MA – May 2016 – L2 – Q4c – Relevant cost and revenue"

ICMA – Nov 2024 – L1 – Q4b – Day-Rate Incentive Scheme Calculation

Calculates the cost per unit for both low and high day-rate incentive schemes.

You're reporting an error for "ICMA – Nov 2024 – L1 – Q4b – Day-Rate Incentive Scheme Calculation"

MA – May 2016 – L2 – Q4c – Relevant cost and revenue

Determine the cost per unit under different day rate schemes and assess the advisability of introducing a high day rate scheme.

You're reporting an error for "MA – May 2016 – L2 – Q4c – Relevant cost and revenue"

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