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Capital expenditure: buying or enhancing non-current assets such as the purchase of machinery or motor vehicles.
Revenue expenditure: an expense like rent, wages or repairs.
Question.
Assume that the scheme was introduced and that in the month of January 2002 the production staff worked for a total of 4200 basic hours. During the month assume that 500 units of Product X were made of which 50 units were rejected as faulty. The basic rate of pay will remain at $3 per hour.In order to calculate the bonus a standard product time of 10 hours is to be allowed for each good unit of Product X.
Bonus = Time saved × 50% basic rate per hourCalculate the total bonus that would be payable to the production staff for January 2002
Need help with this calculations for the bonus
450 good units made. Time these should take = 450 x 10 =4500
Actual time = 4200
Time saved = 300
Bonus = 300 x $3 x 50% = 450.
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