Reference no: EM132655574

Productivity Today Limited is a newly established company that manufactures ladies'  designer clothes for a departmental store. It has one employee in each section of its sewing department. Details of one working period are shown below.

Name of employee         Nancy            Progress             Naomi

Output (units)               270                    200             220

Standard hours per unit   0.18                    0.25           0.2

Time taken in hours        40                        38            36

Rate per hour (K)         12,500                   10,500    12,000

Rate per unit (K)           2,000                     2,500     2,400

Question (a) Calculate the earnings of each employee as determined by each of the following methods:

(i) Hourly rate

(ii) Piece work

(iii) Individual bonus scheme according to the 100% participation scheme with 100 as standard performance.

Question (b) Calculate:

(i) The employees' individual performances

(ii) The average performance for the three employees. Performance is calculated as (Standard time allowed/Actual time spent)

(c) Management is now in the process of choosing and adopting a payment method to be used by the company's payroll. Suggest, with reasons, which one of the three methods above should be chosen.