Case study



Let’s try to the real situation with two person’s K-value based on company’s approaching way as we have already seen above sample, and micro level’s factors are not considered such as income tax, overtime allowance, Annual allowance, and so on. However, we will be able to see the difference between two person’s time value in currency called K-value by distinguish based on their actual Salary with constant cost and variable cost.


Sample

Duty hours/day

Salary/Month

Working days

June.2016

A

9 hours

$ 1,500

Mon ~ Fri(5 days)

22 days - working

8 days - Day-off

B

9 hours

$ 2,000

Mon ~ Sat(6 days)

26 days - working

4 days - Day-off


Img. 01. Kd-value’s composition

K-value

A

B

Meaning

Kd(L) = Salary / Awd

1500 / 22 = 68.18

2000 / 26 = 76.92

Total working hours value in a day

Kh = Kd(L) / Awd

68.18 / 9 = 7.57

76.92 / 9 = 8.54

Hour value

Kd(E1) = (24 - Awd) * Kh

(24 - 9) * 7.57 = 113.5

(24 - 9) * 8.54 = 128.1

Total not working hours value in a day

Kd = Kd(L) / Kd(E1)

113.5 + 68.18 = 181.73

76.92 + 128.1 = 205.02

A working day value



K-value

A

B

Meaning

Kd(Awd) = Kd * Awd

181.73 * 22 = 3,181.73

205.02 * 26 = 5,330.52

Total working days value in month

Kd(E2) = Nwd * Kd

8 * 181.73 = 1,453.84

4 * 205.02 = 820.08

Total value of weekend in a month

MKT = Kd(E2) + Kd(Awd)

3,988.06 + 1,453.84 = 5,451.9

5,330.52 + 820.08 = 6,150.6

Total value of the month


As a result, the actual worth of A becomes $5,451.9 by working 9 hours per day for 5 days in a week with $1,500 as salary and the actual worth of B becomes $6,150.6 by working 9 hours per day for 5 days in a week with $2,000 as salary.


1. Kd(E1) and Kd(E2) are only values that belong to ourselves called capital which we can purely handle. But, these could be expense or income, truly depends on how we utilize.

2. Kd(L) is the value that we cannot do anything. Because we agreed on exchanging by our time with the employer who we are working for the salary during that particular time, hence “L” is liability which is not ours but we have. We give our time to the employer for the salary.


However, as earlier Bread example, Net-income = Gross Profit - Total Expenses. The gross profit of A and B are $5,451.9 and $$6,150.6, we will figure out total expenses by segmented of Kd(E1) section. Kd(E1) section is the period without working time in a day from 18:00 to 09:00 next day.
For finding out more detail value for each, we will add few factors as fixed cost and variable cost as expenses.

1. commute time : spending time to go to the work place for salary will be expenses

2. Sleeping time : for maintaining our body will be expenses

3. Eating time : for maintaining our body will be expenses



Ostensibly, the salary of A is less than B. But, if we see actual total process of whole 24 hours usage, A’s net-income is more higher than B.

Based on K-value formula, A’s daily value is $ 181

Working time, 9 hours are already exchanged with $68 by other.

Commuting time, 1 hour is spent for working time, so it will be expense.

eating time, 1 hour is spent for maintaining ourselves, so it will be expense.

sleeping time, 7 hours are spent for maintaining ourselves, so it will be expense.

not defining, 6 hours are only time that we can use.

For earning $68, A spent as below :

1 hour($8) + Train ticket($2) = $10 : simultaneously used.

1 hour($8) + Lunch($7) + Dinner($7) = $22 : simultaneously used

7 hours($53)

have been spent., which mean, A spend $85 for earning $68 per day But, A has the not-defining value which is equal to $45, therefore, income of $68 plus $45 is equal to $113 substitutes $85 = $28. As a result A’s net-income becomes $28.



B’s daily value is $205 which is high then A, but see the whole spent value.

Working time, 9 hours are already exchanged with $77 by other.

Commuting time, 3 hours are spent for working time, so it will be expense.

eating time, 1.5 hour is spent for maintaining ourselves, so it will be expense.

sleeping time, 7.5 hours are spent for maintaining ourselves, so it will be expense.

not defining, 3 hours are only time that we can use.

For earning $77, B spent as below :

3 hour($17) + Train ticket($4) = $21 : simultaneously used

1.5 hour($9) + Lunch($7) + Dinner($10) = $26 : simultaneously used

7.5 hours($64)

have spent, which mean, B spend $111 for earning $77 per day which is totally bankrupt.


9 hours($77), 3 hour($17) + 1.5 hour($9) + 7.5 hours($64) have spent, which mean, B spend $111 for earning $77, B also has the not-defining value which is equal to $38, therefore, income of $77 plus $38 is equal to $115 substitutes $111 = $4. As a result B’s net-income becomes $4.


Income(Salary)

Capital

Expenses

Net income

A

$68

$113

$85

($68 + $113) - $85 = $28

B

$77

$128

$111

($77 + $128) - $111 = $4


Income of B is 11.6% higher than of A, but B’s actual net-income is 7 times less than A.

Next Step : Calculator >> Time value