The standard output of a product has been fixed at 6 units in a day of 8hours, for which wages of12/-.find the total wages as per piece rate and hasley plan when the output is 5unit and 8 units
The correct answer and explanation is :
In this scenario, we are working with a piece-rate wage system and the Hasley plan for determining wages based on a fixed output rate and unit prices.
Given:
- Standard output per day = 6 units (in 8 hours)
- Wages for the standard output = £12
- Output for calculation = 5 units and 8 units
Let’s break down the two methods for determining wages: Piece Rate System and Hasley Plan.
1. Piece Rate System:
In the piece-rate system, workers are paid according to the number of units they produce.
- Piece Rate Calculation: To calculate the piece rate, divide the wages for the standard output by the number of units in the standard output: [
\text{Piece Rate} = \frac{\text{Wages}}{\text{Standard Output}} = \frac{12}{6} = 2 \text{ per unit}
] For 5 units: [
\text{Wages for 5 units} = 5 \times 2 = 10
] For 8 units: [
\text{Wages for 8 units} = 8 \times 2 = 16
]
2. Hasley Plan:
The Hasley Plan involves paying workers a fixed rate for meeting or exceeding the standard output. If the worker produces less than the standard output, they are still paid for the standard output.
Under this plan, wages are calculated as follows:
- Normal wages are calculated for the standard output, which is £12 for 6 units.
- Bonus for excess output: If the worker produces more than the standard output (here, 6 units), they are rewarded with a bonus. The bonus rate is calculated as the difference between the actual output and the standard output, multiplied by the piece rate.
- Bonus for 8 units: [
\text{Bonus} = (8 – 6) \times 2 = 2 \times 2 = 4
] Total wages = £12 (standard wages) + £4 (bonus) = £16 - For 5 units: Since the output is less than the standard (6 units), the worker is still paid the standard wage of £12 under the Hasley Plan.
Summary of Wages:
- Piece Rate System:
- For 5 units: £10
- For 8 units: £16
- Hasley Plan:
- For 5 units: £12 (standard wage)
- For 8 units: £16 (standard wage + bonus)
Conclusion:
- Under the Piece Rate System, wages vary directly with output. The more units produced, the higher the wages.
- Under the Hasley Plan, wages are guaranteed to be at least the standard wage for the output level. If the output exceeds the standard, additional bonuses are earned.
Both systems reward higher productivity, but the Hasley Plan ensures a guaranteed minimum wage.