14-4. Group Bonus Plan. Employees of Chianti Enterprises work in groups offive, plus a group leader. Standard production for a group is 400 units for a40-hour week. The workers are paid $4 an hour until production reaches 400units; then a bonus of $1.20 per unit is paid, with $1 being divided equallyamong the five workers and with the remainder passing to the group leader(who is also paid a weekly salary of $150). Factory overhead is $3 per directlabor hour and includes the group leader's earnings.The production record of a group for one week shows:Monday....Tuesday..Wednesday.Thursday..Friday..430HoursWorked4040404040UnitsProduced728195102102PLANNING AND CONTROL OF MATERIALS AND LABOR PART IVRequired: (1) Based upon the above data, show the week's earnings of thegroup (excluding the leader), the labor cost per unit, the overhead cost per unit,and the conversion cost per unit (carrying figures to three decimal places).(2) Assuming Chianti Enterprises uses the group bonus plan, a scheduleshowing daily earnings of the group (excluding the leader), unit labor cost, unitoverhead cost, and the conversion cost per unit.

Labor cost control refers to the process of managing and regulating the expenses associated with the…

14-4. Group Bonus Plan. Employees of Chianti Enterprises work in groups of five, plus a group leader. Standard production for a group is 400 units for a 40-hour week. The workers are paid $4 an hour until production reaches 400 units; then a bonus of $1.20 per unit is paid, with $1 being divided equally among the five workers and with the remainder passing to the group leader (who is also paid a weekly salary of $150). Factory overhead is $3 per direct labor hour and includes the group leader's earnings.

14-4. Group Bonus Plan. Employees of Chianti Enterprises work in groups of five, plus a group leader. Standard production for a group is 400 units for a 40-hour week. The workers are paid $4 an hour until production reaches 400 units; then a bonus of $1.20 per unit is paid, with $1 being divided equally among the five workers and with the remainder passing to the group leader (who is also paid a weekly salary of $150). Factory overhead is $3 per direct labor hour and includes the group leader's earnings.

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter3: Accounting For Labor

Section: Chapter Questions

Problem 3E

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