Question: Silverline Ltd operates a group incentive scheme. A minimum hourly rate is guaranteed to each of the six employees in the group if actual output

 Silverline Ltd operates a group incentive scheme. A minimum hourly rate

Silverline Ltd operates a group incentive scheme. A minimum hourly rate is guaranteed to each of the six employees in the group if actual output for the week is less than the standard output. If actual output is greater than the standard output, the hourly rate of each employee is increased by 4% for each additional 600 units of output produced. The standard output for the group is 12,000 units for a 40 hour week. During the week ended 31 Dec., each employee in the group worked 40 hours; actual output and minimum hourly rates were as follows: Employee Actual Output Minimum hourly (units) rate $ Ram 2,500 0.60 Hari 2,700 1.00 Mohan 2,400 0.60 Shyam 2,500 0.80 Hanuman 2,460 0.60 Krishna 2,440 0.40 You are required to: (i) Calculate the earnings of each employee. (ii) Appraise the effectiveness to the company of this group incentive scheme

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!