QUESTION 3

a) Muhammad commenced his business, Mafh Bakery in January 2014. Muhammad

employs Pn. Anis, a very experienced baker and Cik Izzah, who was a cupcake seller for
the last 3 years. Both of them are responsible to produce cakes and cupcakes which are
ordered by Mafh Bakerys customers.
Since the demand has increased, Muhammad hires Encik Amzar Jalil as a driver for his
bakery. At the same time, Cik Athirah has been appointed as an accountant in Mafh
Bakery. The business operates daily from 8.00 am to 7.00 pm, and is being monitored
consistently by his son, Farid who works as a cashier. The company also hires Hafie as a
security guard.

Required:
Identify direct labours and indirect labours amongst the workers mentioned above. Give
reasons for each of your answers.

Direct Labours : Pn. Anis and Cik Izzah.

-

Because both of them are responsible to produce cakes and cupcakes which are
ordered by Mafh Bakerys customers.

Indirect Labours : Muhammad, Encik Amzar Jalil, Cik Athirah, Farid and Hafie.
-

Because they are not involved in the production.

b. Due to financial insolvency Muhammad has sold his business to Mohd Rafiq. Rafiq, then
restructured the business and hire another four workers, Amin, Hana, Ashikin and Shatirah. Amin

and Hana are paid on hourly worked, while Ashikin and Shatirah are paid on the number of units
produced.
Payment to Ashikin and Shatirah are based on straight piecework and differential piecework
respectively. They will be paid on good units only and are promised a monthly guaranteed
minimum wages of RM 1,200.
The workers normally work seven (7) hours a day, Monday to Friday a week. Overtime rate will
be at 150% of the rate. The following information relates to the four workers for the month of
January 2014.

Amin
Hana
Ashikin
Shatirah

Unit
Produced
50
60

Hours
Worked
50
40
44
46

Rate per
Hour (RM)
20
30
20
30

Rate per Unit

(RM)
30
20

Defected
Units
2
0

The differential piecework wages will be as follows:

Up to 20 units
21 40 units
41 50 units
51 units and above

RM 10 per unit
RM 12 per unit
RM 15 per unit
RM 20 per unit

Required:
i.
ii.

Calculate the gross wages for the four workers of Mafh Bakery.
State one (1) advantage and two (2) disadvantages of differential piecework scheme
of rumuneration

i)
AMIN (TIME BASED)

BASIC WAGES = NORMAL WORKING HOURS x NORMAL RATE PER HOUR

= (7hrs x 5days) x RM20
= RM 700

OT PAYMENT = (ACTUAL HOURS WORKED NORMAL WORKING HOURS) x OT

RATE PER HOUR
= (50hrs 35 hrs) x (150/100 x RM20)
= RM 450

GROSS WAGES = BASIC WAGES + OT PAYMENT

= RM 700 + RM 450
= RM 1150
HANA (TIME BASED)
BASIC WAGES = NORMAL WORKING HOURS x NORMAL RATE PER HOUR
= (7hrs x 5days) x RM30
= RM 1050

OT PAYMENT = (ACTUAL HOURS WORKED NORMAL WORKING HOURS) x OT

RATE PER HOUR
= (40hrs 35 hrs) x (150/100 x RM30)
= RM 225

GROSS WAGES = BASIC WAGES + OT PAYMENT

= RM 1050 + RM 225
= RM 1275

ASHIKIN (STRAIGHT PIECEWORK)

BASIC WAGES = NO. OF UNIT PRODUCED x RATE PER UNIT

= (50 units 2 units) x RM30
= RM 1440

GMW

= RM 1200

GROSS WAGES = RM 1440 BECAUSE BASIC WAGES IS HIGHER THAN GMW.

SHATIRAH (DIFFERENTIAL PIECEWORK)

1st 20 units x RM10

= RM 200

Next 20 units x RM 12 = RM 240

Next 10 unit x RM 15 = RM 150
Last 10 units x RM 20 = RM 200
= RM790

GROSS WAGES = RM 1200 BECAUSE GMW IS HIGHER THAN BASIC WAGES.

ii)
ADVANTAGES
1. Easy and simple to administer

DISADVANTAGES
1. Quality output may be
compromised
2. New workers will be at a more
disadvantage until they are more
familiar with the work routines.