Question

Jenny's Glass Shop sells handmade glass objects produced by her employees. She pays the employees a set amount for each piece they produce regardless of the amount of time it takes. She pays them on a:

A) Hourly basis
B) Commission basis
C) Piece rate basis
D) Salaried basis

Answer 1

Jenny's Glass Shop pays its employees a set amount for each piece they produce, known as a piece rate basis. This is different from hourly, commission, or salaried pay structures, as it is directly tied to the quantity of items made.

Step-by-step explanation:

When considering Jenny's Glass Shop, which sells handmade glass objects produced by her employees and pays them a set amount for each piece they produce, regardless of the time it takes, we can determine the basis on which employees are compensated.

If they are paid a set amount per item created, then this is known as a piece rate basis. This contrasts with being paid by the hour (hourly basis), earning a percentage on sales (commission basis), or receiving a preset amount of money regularly (salaried basis). In Jenny's case, option C) Piece rate basis is the correct answer because the pay is tied directly to the quantity of products made, not the time spent or the total sales value of the items.