Labour Costing Flashcards
What are the advantages of a piecework remuneration scheme for the worker and the firm?
The worker - if they are competent they will be rewarded for their efforts. They may be more satisfied and attracted to the company. They may even start suggesting ways to be more productive, thus creating a higher output, which leads to a higher wage.
The firm - there will be more output, and workers may cooperate more with management since improved productivity directly leads to higher pay. More so, less supervision is required because the need to check on whether workers are working is less.
What is job costing?
Job costing is a specific order costing technique. It is a costing method whereby direct costs are traced to each job and then manufacturing overheads are absorbed by individual jobs.
It is used in industries such as: printing presses and automobile garages.
What is Labour Turnover?
Labour turnover refers to the net departure of employees over a defined period of time. It can be divided into voluntary vs involuntary and avoidable vs unavoidable labour turnover.
Some common causes of labour turnover include: employee dissatisfaction, organisational downsizing, and employee relocation.
Disadvantages of a Piecework Remuneration Scheme
- Greater chance for ruined products, due to low quality.
- More difficult to calculate wages
Advantages of a bonus system based on time saved.
- Workers are guaranteed weekly wage but are also rewarded for extra efforts.
- Productivity is bound to increase
Disadvantages of a bonus system based on time saved.
- Difficult to devise a bonus scheme
- Employees don’t know their wages in advance
What is an advantage for the price rate pay?
It is an incentive to work harder leading to more output.
Name ONE advantage and ONE disadvantage of a time based wage.
- Less quality control and inspection of products is required
- No incentive to increase efforts, thus output may tend to be lower.
