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PT. ABC has an assembly department where the standard production is 30 units / hour in...

PT. ABC has an assembly department where the standard production is 30 units / hour in working time for 8 hours / day. The hourly rate is $ 10 and giving incentives gives 5% on everything that can be saved. An incentive plan is used where workers receive 80% of the time saved each day. With the following conditions: Monday 250 units with 8 hours, Tuesday 255 units 8 hours, Wednesday 260 260 and 8 hours.
Requested: calculate usable incentive income where workers receive 70% of the time saved every day

Solutions

Expert Solution

ONE hour or 60 Minutes Standard PRODUCTION   : 30 UNITS

ONE Day working Time : 8 HOURS

Total production in ONE DAY Working Time : 240 Units

Monday Total time Saved : Actual production - Standard Production : 250 units - 240 units : 10 units

Time saved in production of above 10 Units : 20 Minutes ( 60 minutes * 10 units / 30 units )

Tuesday Total time Saved : Actual production - Standard Production : 250 units - 240 units : 15 units

Time saved in production of above 15 Units : 30 Minutes ( 60 minutes * 15 units / 30 units )

Wednesday Total time Saved : Actual production - Standard Production : 260 units - 240 units : 20 units

Time saved in production of above 10 Units : 40 Minutes ( 60 minutes * 20 units / 30 units )

Hence, usable incentive income where workers receive 70% of the time saved on:

Monday : 70%(20 minutes/60 minutes )* 5% of hourly rate is $ 10 : $ 0.12

Tuesday : 70%(30 minutes/60 minutes ) * 5% of hourly rate is $ 10 : $ 0.175

Wednesday : 70%(40 minutes/60 minutes )* 5% of hourly rate is $ 10 : $ 0.233

ekkarill92 answered 2 years ago
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