CA Inter P4 · Chapter 3 · Question 9 of 11
A worker is paid ₹520 per day of 8 hours for 6 days a week for 52 weeks, including 12 paid holidays and 15 days of paid leave. The employer contributes 12% of wages towards provident fund. Normal idle time is 5% of hours available for work. The effective employee cost per productive hour (rounded to two decimals) is:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) ₹83.89
Explanation
Annual cost = 312 days x ₹520 = ₹1,62,240 plus PF 12% = ₹1,81,708.80. Days available for work = 312 - 12 - 15 = 285; hours = 285 x 8 = 2,280; less 5% normal idle time = 2,166 productive hours. Effective rate = ₹1,81,708.80 / 2,166 = ₹83.89 (rounded). Ignoring idle time gives ₹79.70.
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