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Labor Cost Control Interview Questions & Answers - Learning Mode

Labor Cost Control Interview Questions & Answers - Learning Mode

It is the system followed by the management to maximize quality output at a minimum cost. Labor cost control includes the process of developing various forms, studying and recording the activities and performance of workers, calculating the correct amount of wages and making payment in time.

Try Labor Cost Control Interview Questions & Answers - Exam Mode

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Labor Cost Control Interview Questions & Answers - Learning Mode
Try Labor Cost Control Interview Questions & Answers - Exam Mode
Question: Give few examples of normal idle time.

Answer: (i) The time taken in picking up the work for the day.
(ii) The time which elapses between the completion of one job and the commencement of the next job.
(iii) The time taken for personal needs and tea breaks.
(iv) The time lost when production is interrupted for machine maintenance. Source:
Question: State the differences between time keeping and time booking?

Answer: Time Keeping is concerned with the attendance and wage calculation of employees whereas Time Booking is the reporting of each worker?s time for each job and department for cost analysis and dividing labor cost into various jobs and departments. Source:
Question: What is labor cost?

Answer: The cost of labor is the sum of all wages paid to employees, as well as the cost of employee benefits and payroll taxes paid by an employer. The cost of labor is broken into direct and indirect costs. Direct costs include wages for the employees physically making a product, like workers on an assembly line. Source:
Question: Explain daily time sheets method of time booking?

Answer: Under this method, a daily time sheet is provided to each worker on which time spent by him on various work orders is mentioned. This method can be conveniently used if the worker works on various jobs of short duration like in maintenance jobs. But this method is disadvantages also as it involves considerable paper work. Source:
Question: What are the functions of time keeping department?

Answer: The main functions of time keeping department are as follows:
1.To maintain discipline, regularly and punctuality in the factory.
2.Meeting the statutory requirements.
3.Preparation of pay rolls where workers are paid on time basis.
4.To record the arrival and departure time of laborers for making distinction between normal time, overtime, delay in attendance and early leaving.
5.For overhead rates, if based on labor hours.
Question: Explain weekly time sheets method of time booking?

Answer: In this method time is recorded for all the jobs done during the week instead of recording the work done for a day only. One sheet is allotted to each worker.It involves less paper work. These types of weekly time sheets are useful for intermittent types of jobs like construction work. Source:
Question: What is indirect labor?

Answer: Indirect labor refers to worker's hours that are spent on working on projects that cannot be traced back to specific production units or products. In other words,indirect labor is employee work that can't be billed to goods produced. Source:
Question: Explain job cards method of time booking?

Answer: Job Card is a method of recording details of time with reference to the jobs or work orders undertaken by the workers. This method facilitates the computation of labor cost with reference to jobs or work orders. Source:
Question: What is the treatment of the cost of normal idle time?

Answer: It is unavoidable cost and as such should be included in cost of production. Source:
Question: Name the two basic methods of labor remuneration.

Answer: There are two basic methods of labor remuneration:
(a) Time Rate System
(b) Piece Rate System
Question: What is abnormal idle time?

Answer: It is that time the wastage of which can be avoided if proper precautions are taken. Source:
Question: What is Halsey Premium Bonus Plan?

Answer: This plan was introduced by F A Halsey in 1891. It is a simple combination of time and piece rate systems. A worker is paid a guaranteed base rate and is rewarded when his performance exceeds standard. A standard time is established in respect of each job or unit. Bonus is paid on the basis of 50% of time saved.The total wages payable is calculated as under:
(Hourly rate X Time taken) + (50% X Time saved X Hourly rate)
Question: What is direct labor?

Answer: Labor involved in production rather than administration, maintenance, and other support services. Source:
Question: What is time booking? What are the different methods used for doing this?

Answer: Time booking is recording the time actually spent by a worker on various jobs done by him in the factory for cost analysis and dividing labor cost into various jobs and departments. It also helps in control over wastage of time- idle time.Different methods used for time booking are:
1) Daily Time Sheets
2) Weekly Time Sheets
3) Job Cards Source:
Question: What is the treatment of the cost of abnormal idle time?

Answer: It is a principle of costing that all abnormal expenses and losses should not be included in costs and as such wages paid for abnormal idle time should not form part of the cost of production. The wages paid for abnormal idle time should be debited to Costing Profit and Loss Account. Source:
Question: Explain Taylor's Differential Piece Rate System.

Answer: This system was introduced by F. W. Taylor, the father of Scientific Management. The main features of this incentive plan are as follows:
a.Day wages are not guaranteed, i.e. it does not assure any minimum amount of wages to workers.
b. A standard time for each job is set very carefully after time and motion studies.
c. Two piece rates are set for each job-the lower rate and the higher rate.

Question: What is labor turnover?

Answer: The ratio of the number of employees that leave a company through attrition, dismissal,or resignation during a period to the number of employees on payroll during the same period.
Question: What is normal idle time?

Answer: It is inherent in any work situation and cannot be eliminated. This represents the time, the wastage of which cannot be avoided and therefore,the employer must bear the labor cost of this time. But every effort should be made to reduce it to the lowest possible level.
Question: What is Rowan Premium Bonus Plan?

Answer: A standard time is established in respect of each job or process. There is a guaranteed base rate. A bonus is paid on the basis of time saved computed as a proportion of the time taken which the time saved bears to the standard time. The total wages payable is calculated as under:
(Hourly Rate x Time Taken) + ( Time Saved x Time Taken) x Hourly rate time allowed. Source:
Question: Explain the time rate system of labor remuneration. How can it be calculated?

Answer: Under the time rate system, workers are paid according to the time for which they work. Payment may be on hourly basis, daily basis or monthly basis. In this system, no consideration is given to the quantity or quality of work done. When payment is made on hourly basis, total wages payable are calculated as follows:
Wages = No. of hours worked x Rate per hour
b)Piece Rate System
Wages under this system are paid according to the quantity of work done. A rate is fixed per unit of produc Source:

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