Example of Labour Remuneration

Beneath a premium bonus scheme, workers obtained a guaranteed basic hourly minimum rate of pay in addition of a bonus of 50 percent of the time saved. So no payment is paid beyond the time permitted but the bonus that is paid at the basic hourly rate is appropriate to the accepted output only. Hence no penalty is imposed on refused output. The specified details are available for the month of January in 2003 year

Required

From the above information estimated for all employee

a) Bonus hours and amount of bonus paid

b) Gross wages earned

c) Labour cost for each good unit sold

Solution

Worker A

Net time saved = Expected time - Time taken

                        = ¼ (474 - 54) - 78 = 1/4/ X 420 - 78 = 105 - 78 = 27 hours

So Accepted time saved = 50/100 x 27 = 13.5 hrs

Consequently bonus hours = 13.5 hours

And Bonus pay = 13.5 x 6 = Shs 81

Worker B

= 1/8 (684 - 84) = Shs 100

Time saved = 100 - 72 = 28 hours 

Bonus hours = 28/100 X 50 = 14 hours

Bonus pay = 14 x 6 = Shs 84

Worker C

= ½ (175 - 25) = 150/2 = 75 hours

Time saved = 75 - 80  = - 5 

Bonus hours = 0

Gross Wages = Regular wage by Bonus

Good units