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1.

A company pays direct operatives a basic wage of £8·50 per hour plus a
productivity bonus. The bonus is calculate as:
[(time allowed – time taken) x (basic rate per hour ÷ 3)]
The time allowed is 2·4 minutes per unit of output. An operative produced
1,065 units in a 371/2 hour week.
What were the total earnings of the operative in the week?
A. £318·75
B. £333·20
C. £340·40
D. £362·10

2. Labour costs may include:


(i) overtime hours of direct operatives at basic rate
(ii) overtime premiums of factory employees
(iii) productive time of direct operatives
(iv) training of direct operatives
Which of the above items will usually be treated as a direct cost?
E. (i) and (ii)
F. (i) and (iii)
G. (ii) and (iv)
H. (i), (iii) and (iv)

3. Which of the following labour records may be used to allocate costs


to the various cost units in a factory?
(i) Employee record card
(ii) Attendance record card
(iii) Time sheet
(iv) Job card
I.(i) and (ii)
J.(i), (iii) and (iv)
K. (ii) and (iii)
L.(iii) and (iv)

4. How is the activity (production volume) ratio calculated?


M.Actual hours  budgeted hours
N.Budgeted hours  actual hours
O.Standard hours for actual output  actual hours
P.Standard hours for actual output  budgeted hours

5. The costs associated with labour turnover can be classified as ‘preventative’


costs or replacement’ costs.
Which of the following is a preventative cost?
Q.Provision of leisure facilities for employees
R.Lower productivity of new employees
S.Increased wastage of raw materials
T.Training costs for new employees

6. Analysis of the gross wages in a factory reveals:


Direct operatives (£) Indirect operatives (£)
Productive hours at basic rate 41,200 17,600
Overtime premium 1,100 450
Idle time 760
Group bonuses 2,780
----------- ------------
Total gross pay 45,840 18,050
What amount would NORMALLY be accounted for as production
overhead?
U. £18,050
V. £18,810
W. £21,590
X. £22,690

7. Which of the following are aspects of payroll systems?


(i) Attendance records
(ii) Calculation of bonuses
(iii) Employee tax codes
(iv) Apportionment of wages to cost centres
Y. (i), (ii) and (iii) only
Z. (ii), (iii) and (iv) only
AA. (i), (ii) and (iv) only
BB. All four items

8. The direct labour capacity ratio for a period was 104%.


What could have caused this?
CC. Actual hours worked being greater than budgeted hours
DD.Actual hours worked being less than budgeted hours
EE. Standard time for actual output being greater than budgeted hours
FF. Standard time for actual output being less than budgeted hours

9. The production volume ratio for a period was 95%.


What could have caused this?
GG.Actual hours worked being greater than budgeted hours
HH. Actual hours worked being less than budgeted hours
II.Standard time for actual output being greater than budgeted hours
JJ. Standard time for actual output being less than budgeted hours

10. An incentive scheme is in operation for each direct worker in a factory. The
basic rate of pay is $8 per hour for an 8-hour day with a bonus if hours worked are
less than the standard hours for the output achieved. The bonus is 50% of the
time saved against standard, paid at the basic rate. A single product is
manufactured and the standard time is 10 minutes per unit.
What is the bonus for a worker who manufactures 60 units in an 8-
hour day?
KK. $0
LL.$4
MM. $8
NN.$16

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