Question

John is an accountant and just earned your CPA. John has decided to open up John’s Tax Service on Main Street. He leases a storefront:   his office in the storefront has glass all around it. John has hired an administrative assistant who sits outside his office. His administrative assistant answers phones, receives and sends emails, sets appointments and other administrative type work. Assuming that John spends most of his time inside the office, should John pay his administrative assistant an hourly wage, piece rates or a % or profits? Explain why.

Answer 1

The piece-rate system isn't suitable, because it's supported the amount of units produced. But, the executive assistant is performing the task that's of an administrative nature and it requires the continual presence of assistant albeit he has no call to attend or reply. the half of of the profit system is additionally not suitable, because the executive assistant isn't in sales and his role is to help John in efficiently removing the work assigned to John and help him focus upon some productive work. Now, it's an hourly wage system that's best suited for administrative assistant, as he's employed for the amount of hours, per day and number of days during a week, requiring him to be present within the office for every of all the hours of labor . The assistant may have 10 calls in one hour or no calls within the next hour, but he has got to remain within the office during work hours, assigned to him. So, the hourly wage is best suited for deciding the compensation of administrative assistants.