Question

A worker earns P10,000 per month on the average and produces 50 units per day. Accordingly, the employer's monthly contribution for SSS, Medicare, Pag-IBIG and EC premiums are P456, P37.50, P10 and P100, respectively. Fringe benefits such as meal and uniform subsidiaries amount to P9,900 per annum. Assuming that there are 330 working days in one year, what is the effective labor cost per unit?

P14.91

P13.48

P13.75

Answer 1

None of the above options are correct as the explanation is below

Gross Pay per Working Day [ ( P 10,000 × 12 months ) / 330 days ] = P 363.63   

Employer's Contribution [ ( 456 + 37.50 + 10 + 100 = 603.50 × 12 months ) / 330 days ] = P   21.95

Meals and Uniform Subsidiaries [ P 9900 / 330 days ] =   P   30

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Effective Rate per day = P 415.58

Divide output per day = P 50

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Effective Labor Cost per unit =    P 8.311

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