Q.1 Which of the following is the main objective of labour cost control?
To reduce raw material cost
To utilize labour efficiently
To increase administrative overheads
To minimize sales expenses
Explanation - Labour cost control focuses on maximizing worker efficiency and minimizing idle time to optimize labour costs.
Correct answer is: To utilize labour efficiently
Q.2 What is time-keeping in labour cost control?
Recording material usage
Recording hours worked by employees
Calculating overheads
Maintaining sales records
Explanation - Time-keeping involves recording the time employees spend at work, which is crucial for wage calculation and productivity monitoring.
Correct answer is: Recording hours worked by employees
Q.3 Which system is used to record the time an employee spends on each job?
Time-keeping
Time-booking
Overtime record
Attendance register
Explanation - Time-booking records the time spent by workers on specific jobs or tasks, essential for job costing.
Correct answer is: Time-booking
Q.4 Which method of wage payment gives a fixed amount per unit of output?
Piece-rate system
Time-rate system
Halsey plan
Rowan plan
Explanation - Under piece-rate, workers are paid based on units produced, encouraging higher output.
Correct answer is: Piece-rate system
Q.5 Idle time is considered as:
Productive time
Unavoidable cost
Loss of time
Indirect material cost
Explanation - Idle time is the period during which workers are paid but not engaged in production, representing a loss.
Correct answer is: Loss of time
Q.6 Which wage incentive plan shares the time saved between employer and employee?
Time-rate system
Halsey plan
Piece-rate system
Taylor’s system
Explanation - Halsey plan allows workers to receive wages for time taken and a bonus for time saved, shared with the employer.
Correct answer is: Halsey plan
Q.7 What is the purpose of job evaluation?
To determine material cost
To establish fair wages
To calculate profit
To allocate overheads
Explanation - Job evaluation is used to determine the relative worth of jobs, ensuring fair and equitable wages.
Correct answer is: To establish fair wages
Q.8 Which document records workers’ attendance?
Time card
Job card
Piece-work sheet
Cost sheet
Explanation - A time card is used to record employees’ attendance, crucial for wage calculation.
Correct answer is: Time card
Q.9 Which type of incentive plan is Rowan plan?
Profit-sharing plan
Group incentive plan
Individual incentive plan
Non-monetary plan
Explanation - Rowan plan is an individual incentive scheme where workers receive bonus proportionate to time saved.
Correct answer is: Individual incentive plan
Q.10 Labour turnover refers to:
Increase in wages
Replacement of workers
Overtime payment
Training of staff
Explanation - Labour turnover is the rate at which employees leave and are replaced within an organization.
Correct answer is: Replacement of workers
Q.11 Which type of idle time is controllable?
Power failure
Machine breakdown due to poor maintenance
Waiting for material
Strike
Explanation - Idle time due to poor maintenance can be controlled by preventive measures.
Correct answer is: Machine breakdown due to poor maintenance
Q.12 What does ‘labour productivity’ measure?
Output per unit of raw material
Output per unit of labour
Cost per unit of overhead
Wages per unit of time
Explanation - Labour productivity measures how much output is generated per unit of labour input.
Correct answer is: Output per unit of labour
Q.13 Which method reduces disputes between employer and employee regarding wages?
Piece-rate system
Time-rate system
Job evaluation
Overtime payment
Explanation - Job evaluation ensures fair wage determination, reducing wage-related disputes.
Correct answer is: Job evaluation
Q.14 Incentive schemes are introduced to:
Increase idle time
Motivate employees
Increase overheads
Reduce output
Explanation - Incentive schemes reward workers for efficiency, motivating them to perform better.
Correct answer is: Motivate employees
Q.15 Which wage system ensures minimum wage protection to employees?
Piece-rate system
Rowan plan
Time-rate system
Halsey plan
Explanation - Time-rate ensures a fixed wage for time worked, protecting employees during low productivity.
Correct answer is: Time-rate system
Q.16 Overtime premium is generally treated as:
Direct wages
Indirect wages
Overhead
Idle cost
Explanation - Overtime premium is usually considered an overhead cost unless incurred for a specific job.
Correct answer is: Overhead
Q.17 Which method of wage payment encourages quality over quantity?
Piece-rate system
Time-rate system
Halsey plan
Taylor’s differential system
Explanation - Time-rate focuses on hours worked rather than units produced, encouraging consistent quality.
Correct answer is: Time-rate system
Q.18 Which is not a cause of labour turnover?
Low wages
Better opportunities elsewhere
High morale
Poor working conditions
Explanation - High morale retains employees, so it does not cause labour turnover.
Correct answer is: High morale
Q.19 Labour cost per unit is calculated by dividing:
Total labour cost by total units produced
Direct material cost by units
Overheads by units
Idle time by total labour cost
Explanation - Labour cost per unit = Total labour cost ÷ Total output units.
Correct answer is: Total labour cost by total units produced
Q.20 Which method of wage payment is most suitable when output is difficult to measure?
Piece-rate system
Time-rate system
Halsey plan
Rowan plan
Explanation - Time-rate is suitable when output is not easily measurable, such as in service jobs.
Correct answer is: Time-rate system
Q.21 Which factor does NOT influence labour cost control?
Training and development
Effective supervision
Worker efficiency
Sales promotion
Explanation - Sales promotion affects sales, not labour cost control directly.
Correct answer is: Sales promotion
Q.22 Rowan plan ensures:
Bonus increases with time saved but proportionately less
Workers get bonus for all units produced
Bonus is equal for all workers
No bonus payment
Explanation - Rowan plan gives proportionate bonus so that employers don’t overpay for large time savings.
Correct answer is: Bonus increases with time saved but proportionately less
Q.23 Which system records reasons for idle time?
Idle time card
Time card
Job card
Piece-work sheet
Explanation - Idle time card helps in recording causes of idle time for analysis and control.
Correct answer is: Idle time card
Q.24 Labour turnover increases costs mainly due to:
Increased selling expenses
Recruitment and training costs
High material costs
More advertising expenses
Explanation - High labour turnover leads to additional recruitment, training, and lower efficiency.
Correct answer is: Recruitment and training costs
Q.25 Which is the primary aim of labour incentive schemes?
To increase idle time
To enhance productivity
To reduce supervision
To eliminate time-keeping
Explanation - Incentive schemes aim to motivate employees to improve productivity.
Correct answer is: To enhance productivity