Time Study-Normal Time and Standard Time

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In an attempt to increase productivity and reduce costs, Pho Shigma Corporation is planning to install an incentive pay plan in its manufacturing plant. In developing standards for one operation, time-study analysts observed a worker for 30 minutes. During that time the worker completed 42 parts. The analysts rated the worker as producing at 130 percent. The base wage rate of the worker is $5 per hour. The firm has established 15 percent as a fatigue and personal time allowance.

a) What is the normal time for the task?
b) What is the standard time for the task?
c) If the worker produced 500 units during an eight-hour day, what wages would the worker have earned?

Hint)
Normal time = {(Time worked) / (Number of units produced)}(Performance rating) Standard time = (Normal time)(1 + Allowances)
OR Standard time = (Normal time) / (1 – Allowances)
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Solution Preview

a) What is the normal time for the task?

Time worked= 30 minutes
Number of units (parts) produced= 42
Performance rating= 130%

Therefore Normal time= 0.9286 minutes = {(30 / 42) x 130.%}

Answer: …