Question: Scanlon plans represent a group-level incentive plan that provides payouts based on whether the implementation of proposals for labor costs savings are successful. Among the

Scanlon plans represent a group-level incentive

Scanlon plans represent a group-level incentive plan that provides payouts based on whether the implementation of proposals for labor costs savings are successful. Among the important determining factors is the calculation of Scanlon ratios (labor costs / sales value of production). Scanlon ratios are compared to a standard. Payouts are made whenever the Scanlon ratio is less than the standard. The Scanlon ratio for 2014 is 0.60, and it is the standard for comparison. Assume that in 2015, total labor costs amounted to $48,000,000 and sales value of production (SVOP) amounted to $45,000,000. Also, assume that total labor costs will increase by 11.0 percent annually and SVOP will increase by 13.0 percent annually starting in 2016. a) The Scanlon ratio for 2015 will be Round your response to the nearest hundredths place

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