The basic purpose of an incentive wage is to induce a worker to produce more so that he can earn a higher wages and at the same time, unit costs are reduced. As a management accountant you have been provided with the following details of An employee operating a machine in a week of 74 normal working hours of shs. 4,000 per hour with each component set to take 20 minutes to produce. In a certain week, he produced 300 units.

Required:

a) Explain the four basic Elements used for computing incentive wages

b) Determine from the above details the gross wages payable to the employee under the following premium schemes and give three benefits of each.

i. Halsey Premium Plan,

ii. Halsey Weir Plan,

iii. Rowan Plan