When the time saved equals 50% of time allowed, Rowan bonus as a fraction of basic wage is:
A100%
B50%
C25%
D75%
Answer & Solution
Correct answer: B. 50%
1. Let time allowed = T; time saved = 0.5T; therefore time taken = 0.5T.
2. Rowan bonus = (time saved / time allowed) × time taken × rate = (0.5T / T) × 0.5T × R = 0.25 T R.
3. Basic wage = time taken × rate = 0.5T × R = 0.5 T R.
4. Bonus / Basic = 0.25 T R / 0.5 T R = 0.5 = 50%.
_Source: ICAI BoS Inter Paper 3, Ch 3 "Employee Cost", §3.8.2 ¶4_
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