Forums › FIA Forums › MA2 Managing Costs and Finance Forums › question on labour costs
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- AuthorPosts
- May 9, 2015 at 7:11 pm #245015
a company manufactures a single
product. currently, the company employs
a team of 6 direct operatives who
produce a total of 2500 units of the
product in a 40 hour week. the hourly
rate of pay for all operatives is 8 eoros.
in an effort to improve productivity, and
thus to increase output in the normal 40
hour week, an incentive scheme has been
suggested. the scheme, which the 6
operatives hav agreed to trial over a 4
week period, provides a differential
piecework payment in addition to a
reduced basic rate per hour. details of
the scheme are:
basic hourly rate 4 euros/ hour
differential piecework rates
1st 2500 units of output in a week 0.375/
unit
output 2501 to 3000 units in a week
0.45/ unit on additional units over 2500
output over 3000 units in a week 0.60/
unit on additional units over 3000
in the 1st week of the trial, total output
was 3080 units in the 40 hours worked
required:
(a)…
(b) for the incentive scheme, calculate:
(i) the labour cost/ unit, based on the 1st
week of the trial;
(ii) the level of output in a 40 hour week
at which total labour cost would be the
same as under the existing time rate
payment system
could u help me with (i) (ii) of this
question - AuthorPosts
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