Kabwe Ltd assembles a product (Tota) from various components using three operative staff (Lusaka, Choma, Kalabo), each working a 40 hour week. The company pays overtime at time and half and a bonus of 75% of time saved at the normal hourly rate.The data below relates to Kabwe Ltd operation in week 10.Operative staff Lusaka Choma KalaboTotal output units 530 600 490Total hours worked 60 hours 45 hours 48 hoursWage rate per hour K18 K20 K15The standard time allowed per unit is 6 minutes irrespective of the operative staff.Required:a) Calculate the total pay for each of the employees in week 10 showing clearly the bonus, overtime premium and basic wage figures.b) Kabwe Ltd management wishes to adopt a piece work scheme to increase the weekly output.State two advantages and two disadvantages of implementing a piece work scheme to Kabwe Ltd.c) Contrast Activity Based Costing (ABC) from Traditional overhead absorption methods. Kabwe Ltd assembles a product (Tota) from various components using three operative staff(Lusaka, Choma, Kalabo), each working a 40 hour week. The company pays overtime at timeand half and a bonus of 75% of time saved at the normal hourly rate.The data below relates to Kabwe Ltd operation in week 10.Operative staffLusakaChomaKalaboTotal output units530600490Total hours worked60 hours45 hours48 hoursWage rate per hourК18К20K15The standard time allowed per unit is 6 minutes irrespective of the operative staff.Required:a) Calculate the total pay for each of the employees in week 10 showing clearly the bonus,overtime premium and basic wage figures.b) Kabwe Ltd management wishes to adopt a piece work scheme to increase the weeklyoutput.State two advantages and two disadvantages of implementing a piece work scheme toKabwe Ltd.c) Contrast Activity Based Costing (ABC) from Traditional overhead absorption methods.

Activity based costing is a method of cost allocation of overhead costs such that, for each…

Answered: Kabwe Ltd assembles a product (Tota)…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Kabwe Ltd assembles a product (Tota) from various components using three operative staff (Lusaka, Choma, Kalabo), each working a 40 hour week. The company pays overtime at time and half and a bonus of 75% of time saved at the normal hourly rate.
The data below relates to Kabwe Ltd operation in week 10.

Operative staff Lusaka Choma Kalabo
Total output units 530 600 490
Total hours worked 60 hours 45 hours 48 hours
Wage rate per hour K18 K20 K15
The standard time allowed per unit is 6 minutes irrespective of the operative staff.

Required:
a) Calculate the total pay for each of the employees in week 10 showing clearly the bonus, overtime premium and basic wage figures.
b) Kabwe Ltd management wishes to adopt a piece work scheme to increase the weekly output.
State two advantages and two disadvantages of implementing a piece work scheme to Kabwe Ltd.
c) Contrast Activity Based Costing (ABC) from Traditional overhead absorption methods.