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An organisation operates a piecework system of remuneration, but also guarantees its employees 80% of a time-based rate of pay which is based on $20 per hour for an eight hour working day. Three minutes is the standard time allowed per unit of output. Piecework is paid at the rate of $18 per standard hour.
If an employee produces 200 units in eight hours on a particular day, what is the employee’s gross pay for that day?
Please don’t simply set test questions and expect an answer. You must have an answer in the same book in which you found the question and so you should ask about whatever it is in the answer that you are not clear about – then I will explain.
Given that they produce 200 units, the standard time is 200 x 3/60 = 10 hours, and therefore the piecework pay is 10 x $18 = $180.
They are guaranteed minimum pay of 80% x 8 hours x $20 = $128. However $180 is above this minimum and so they are paid $180.
Please do watch my free lectures on this, because I explain exactly how to deal with this sort of question in the lectures (and you cannot expect me to type out all my lectures here).
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