A worker has a time rate of 15/hr. He makes 720 units of component (standard time : 5 minutes/ unit) in a week of 48 hours. His total wages including Rowan bonus for the week is
Correct answer: D. 864
- A. 792
- B. 820
- C. 840
- D. 864
Explanation
Standard time for 720 units is 60 hours, giving 12 hours saved; Rowan bonus is 12/60 × 48 × 15 = 144. Adding this to basic wages of 48 × 15 = 720 gives total wages of 864.
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About Cost Accounting
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
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