Advice 1: How to determine piece-rate pricing

Piecework rate is calculated when the transfer of employees salary or hourly wage rates on a payment form from the development, which is defined by a single unit of output produced per unit of time. Quote unit deals with the quantity surveyor on the basis of the analysis of the employee or the brigade for several months.
How to determine piece-rate pricing
You will need
  • - calculation of production;
  • - calculation of average daily wages.
To determine piece-rate pricing for the products produced by one employee perform the analysis work for three, six or twelve months. All products manufactured for the period analysis, fold, divide by the number of working days in the calculation period. You will receive the average of products in one day. Divide the result by the number of working hours, you get the number of products per hour.
Next you need to produce cost of products. To do this, calculate the average daily salary of the employee. The calculation make by adding up all earned amounts for the 12 months divide by 12 and by 29.4 average number of working days in the month. You'll have a patch in one day.
The number of products in one day and the salary is two comparable things. For example, if your employee produces in one day 4 parts, then divide the average salary by 4, you will receive the value of one part. But this calculation often leads to the fact that prices per unit of production is not quite true, this is the analysis work of several employees working in one tariff category or having the same qualification.
To determine the average rate per piece fold the amount of manufactured products for three, six or twelve months teams of employees, divide by the number of working days during which the released products. Then calculate the average earnings over the analysis period. Divide the average daily salary by the number of products in one day. You will receive the average piecework rates, which will be more accurate.
This kind of calculation will allow you to make the payment of wages in accordance with the actual work of each employee. If someone is slower, respectively, and it will get smaller.
Translation for piecework stimulates productivity, and number of manufactured products increases significantly, but the mechanisms on which it is made, should run smoothly. The old equipment is impossible to produce record volumes of product.

Advice 2: How to calculate piece-cost

Piecework rate is used to determine the employee's earnings under a piecework system of remuneration. This calculationtion to measure the amount of the employee per unit of production or per executed transaction expressed in monetary terms.
How to calculate piece-cost
You will need
  • 1. Knowledge of methods to study timing: electronic timing and photos of the day.
  • 2. The unified tariff qualification reference of works and occupations of workers (ETCS).
  • 3. Tariff system operating in your industry.
Determine the category of the work performed using ETCS. Rate the nature and complexity of operations and refer to the tariff level.
Using a scale of charges set out in your organisation or an approved centrally (in the public sector), determine the hourly tariff rate corresponding to this category of work.
Determine the time (in hours or minutes) or production rate in the physical measure (kilograms, meters, pieces, etc.) on the basis of photographs of the working day or timing.
Calculate piece rates. This can be done in two ways. If in Step 3 you identified the time, then piece quote can be obtain by multiplying the rate for your specified time. If you determined the rate of production, the piecework rate you get by dividing the rate of pay (hourly or daily) to an appropriate output rate (hourly or daily).
The size of wages does not depend on when the work was performed: daytime or night time. To change the size of the piece-rates required if there is:
- change labour standards (standards and standard time) in connection with the improvement of the production conditions (e.g., changing technology, the replacement snap-on is more progressive in the improvement of working methods).
- revision tariff rates.
Useful advice
By determining the wages necessary to keep consistency of time units that are selected tariff rates, units of time, relative to established norms (hour or shift). If you are using a change rate of production when calculating rates use changeable (day) tariff rate. If you are using the hourly rate of production to determine pricing, use the hourly tariff rate.
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