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An organization operates a piece system of remuneration, but also guarantees its employees 80% of a time-based rate of pay which is based on 20 usd per hour for a 8-hour working day. 3 minutes is the standard time allowed per unit of output. Piecework is paid at the rate of 18 usd per standard hour.
If an employee produces 200 units in 8 hours on a particular day, what is the employee’s gross pay for that day?
Solution given:
Standard time for actual output of 200 units
= 200 units x 3 minutes per unit = 600
minutes or 10 hours
Gross pay = 10 hours x $18 = $180May i know what should i understand from “80% of a time-based rate of pay which is based on 20 usd per hour for a 8-hour working day”?
It means that the minimum they will be paid is 80% of the rate they would be paid for 8 hours are $20 per hour.
It is only relevant if the gross pay calculated otherwise comes to less that the minimum.
Thanks for your time in replying.
However, the standard time for the actual output of 200 units is 10 hours while the question also said “If an employee produces 200 units in 8 hours “, why Gross pay is not 8 hours x $18 hours = 144 usd ?
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