Question

As explained in the Help section for the Workforce Compensation, Training, and Product Assembly decision screen, if (1) a company pays a drone PAT member an annual base wage of $22,000, an $800 year-end bonus for perfect attendance, and provides a company-paid annual fringe benefits package worth $3,200 and (2) a PAT is paid a $6 assembly quality incentive per UAV drone assembled that is equally divided among 4 PAT members.

Then if a drone PAT's productivity is 1500 drones per year:

a.the labor cost for a drone assembled at overtime would be $76.00.

b. the labor cost for a drone assembled at overtime would be $93.33.

c. the total compensation cost per drone assembled would be $77.07.

d. the labor cost for a drone assembled at overtime would be $85.07

e. the labor cost for a drone assembled at overtime would be $75.33.

Answer 1

e. the labor cost for a drone assembled at overtime would be $75.33.

Explanation:

PAT: Product assembly team, consisting of 4 members.

Cost per PAT member

Annual base wage: $22,000

Bonus for attendance: $800

Fring benefits: $3,200

Quality incentive: $6 x 1500 drones / 4 members = $2,250

TOTAL: $28,250 per member

TOTAL per PAT: $28,250 x 4 = $113,000

TOTAL per drone: $113,000/1500 = $75.33

The right option is e. the labor cost for a drone assembled at overtime would be $75.33.

Answer 2

e. the labor cost for a drone assembled at overtime would be $75.33.

Explanation:

From given data

income of a single PAT member is $22,000+$800+$3,200=$26,000

The annual income of 4 PAT members is 4*($26,000) = $1,04,000 --------->(1)

and also a PAT is paid a $6 assembly quality incentive per UAV drone assembled that is equally divided among 4 PAT members.

And the Quality incentive per UAV drone for 4 PAT members = $6, and as the PAT's productivity is 1500 drones per year.

The total Annual Quality incentive for 4 PAT members = 1500*($6) = $9,000 --------->(2)

Hence, the Company invests a total labor cost of $1,04,000 + $9,000 [From, (1)+(2)], for 1500 drones

Thus, the Company invests a total labor cost of $1,13,000 for 1500 drones

Thus, for each drone the investment for the labor cost becomes ($1,13,000) / 1500 = $75.33

Hence, the labor cost for a drone assembled is $75.33

e. the labor cost for a drone assembled at overtime would be $75.33 is the answer