Employees in the Fabrication Department of Alexander Company are currently paid $10 per hour for an 8-hour shift. For the past several weeks, production has averaged 5 units per hour per worker. Factory overhead in this department is $12 per direct labor hour. Employees and management are considering the following piecework proposal:

Required:
(1) Prepare an analysis schedule for the proposal, showing production at each of the following levels: 40, 45, 50, 55, and 60 units per 8-hour day. Compute unit costs to the nearest cent.
(2) Does the piecework proposal appear advantageous to employees and/or to management?

Transcribed Image Text:

Piecework Rate for All Units Produced for the Day $2.00 2.12 2.20 2.30 2.40 Units Assembled per 8-Hour Day up to 44 45 to 49 50 to 64 55 to 59 60 and above