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Sir, would you please help me with the following question?
An organization 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?
here are 2 figures that I have worked out
(1) $20*8hrs= $160
(2) $18 *(200 units*3/60)= $180but I didn’t know which one is gross pay. I’m confused by ‘gross pay’ given in the question above.
🙂 Thanks in advance.
Gross pay is simply the full pay they are getting (before any taxes are taken off).
In this question, the guaranteed pay is 80% x 8 hours x $20 = $128.
This means that they must be paid at least $128. If the piecework amount is higher then they are paid the piecework amount, but if the piecework amount is lower then they will receive $128.The piecework amount is 200 x 3/60 x $18 = $180.
This is higher than the guaranteed amount, so they will be paid $180.
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