Please solve this cost (labour) problem

Rs.6250

But How?

in normal circumstances

100min is required to produce 1unit (80/80%),therefore 25000 hrs are required to produce 15000units at a cost of rs 500000(25000*20/hr)

after implementation

90 min is reqd to produce 1 unit (80-8/80%) and the total cost works out to Rs 450000

Rs 50000 is the savings for 12 months,for 1.5 month it is Rs.6250

if you consider the cost of the jig then it is 49000*1.5/12=6125

Reduced standard time is 8 minute, but the efficiency is 80% so time actually reduced is 10 minute.

No. of piece produced in a year is 15000 so total time reduced is 15000*10=150000 minutes.

150000/60=2500 hrs and wage rate  of  8 hrs is 160 so total wage rate is 2500*160/8=50000 Rs.

Total saving of wage rate of 1 year is 50000 and award equivalent to one and half month is given so,

50000*1.5/12=6250.

Therefore the amount of award payable is Rs.6250.

6125 is corrrect answer

Agree with Parmeshwar. You have to deduct cost of jig (1,000/) from the saving Rs. 50,000.So monthly saving is Rs4,083.33 and Award is 1.5x 4,083.33=6,125.00