Question

The term 'remuneration' means compensation or pay, but it has a broader meaning than pay because it can include not just basic salary or bonuses but commissions and other payments or benefits paid under the terms of an employment contract as well. It is the reward for employment in the form of pay, salary, or wage, including allowances, benefits (such as company car, medical plan, and pension plan), bonuses, cash incentives, and monetary value of the non-cash incentives.

Which of the following is not correct about the time-rate system?

[1 mark]

• A. It fails to discriminate between an efficient worker and an inefficient one.
• B. Efficiency of workers is low under this system as workers have a tendency to do minimum work.
• C. It is simple and easy to understand.
• D. It is easy to determine labour cost per unit.

Answer 1

The correct option is D It is easy to determine labour cost per unit.

Determination of labour cost per unit is one of the merits of a piece-wage system. All others define the time-rate system.