Question

The Henry-Bell organization uses the Scanlon plan to provide incentives to its employees. The workers produce electrical components worth $5 million. The target ratio set by the organization is 30 percent. The employees will be given a bonus if the actual labor costs are less than?

Answer 1

$1.5 million

Step-by-step explanation:

The computation of a lesser amount of the actual labor cost is shown below:

= Worth value of electrical components produced × target ratio

= $5 million × 30%

= $1.5 million

Simply we multiply the Worth value of electrical components produced with the target ratio so that the correct value can come so that we can take the discussion on the bonus distribution