CA Inter P4 · Chapter 3 · Question 4 of 11
Under Taylor's differential piece rate system, the standard output is 50 units per day and the normal piece rate is ₹12 per unit. A low rate of 83% of the piece rate applies below standard and a high rate of 125% applies at or above standard. A worker produces 48 units in a day. His earnings for the day are:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) ₹478.08
Explanation
Output of 48 units is below the standard of 50 units, so the low rate applies: 83% x ₹12 = ₹9.96 per unit. Earnings = 48 x ₹9.96 = ₹478.08. Taylor's plan penalises workers falling short of standard, which is why it is criticised as harsh.
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