labour accounting — OpenTuition Forums

MMariam11y ago

i have a question in labour accounting a co.operates a piece work remuneration but also guarantees an 80 per cent time based rate of pay which is based on $20 per hour for an 8 hour work day. 3 minutes is the standard time per unit of output. piecework is paid at the rate of $18 per standard hour If 200 units are produced in 8 hours, what is the employee's gross pay for that day.

John MoffatTutor11y ago#1

The pay for piecework is $18 per hour and each using is allowed 3 minutes. So you can cost out how many hours are allowed for 200 units, and multiply by $18. Because they are guaranteed a time based rate, then you calculate 80% x 8 hours x $20. They will receive the higher of the piecework amount and the guaranteed time based amount.

MMariam11y ago#2

this is what I did time allowed : ( 200 * 3 / 60 * 18)=$180 piecework:( 80% x 8 hours x $20.)= $128 but what am I meant to do to get the gross pay? I'm stuck

John MoffatTutor11y ago#3

It is as I wrote before. They get paid the higher of the two figures (in this case 180). If there was no guaranteed rate then they would just get paid the piecework amount. The guaranteed rate means that they will never be paid less than the time rate of 180 (but they will be paid more if the piecework amount came to a higher figure).

MMariam11y ago#4

Ok duly noted :-D

John MoffatTutor11y ago#5

You are welcome :-)