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Starting Date Wednesday, April 25, 2012
Closing Date Friday, April 27, 2012


Discussion Question:

“Labor”

 

Ballpoints Manufacturing Company (BMC) located in an Asian country, is a market leader in manufacturing and selling of executive class ballpoints. The company produces only one brand – Executive Qalam bearing the brand name of Extv. These high class ballpoints are used by senior corporate executives only. Major sales of the company go across the Globe. A thin amount of quantity is sold in the country only to the big corporations on the orders received from them.

 

In order to serve the niche, BMC enjoys outclass research facilities at its headquarter. To stimulate the workers, the company offers many incentive plans. Due to these lucrative incentive plans, the workers prefer to work hard and stay happily in the company even during calendar holidays. One of such plans has recently been developed by the core management team working at the company’s factory.

 

During the month of February, BMC has received a special export order from Corporate Executives International (CEI) of a European country of 150 Qalams to be delivered in the month of March. These Qalams are to be used by the corporate executives to be gathered at the coming Corporate Executive Conference on “Corporate Financial Leadership” held by CEI.

 

Mr. Management Accountant – BMC’s management accountant with consultation of the company’s Core Management Team has estimated a special wage rate of Rs. 300 per hour per worker for special group of workers to be worked on this order. The workers will remain for the normal working hours - 8 hours a day for the complete 30 days period.

 

The company’s Core Management Team is planning to introduce an Incentive Bonus Plan. Under which, the company expects its workers to complete their daily work 2 hours earlier than the normal 8 hours job. As per the plan, each of the workers working on this special order, in addition to the regular earnings, will be given the bonus as follows:
 ·      40% of 20% of the total time saved;

  • 25% of the next 30% of the total time saved; &
  • 15% of the remaining time saved.
     

Requirement

 

By considering the above information you are required to answer the following:

 

  • Determine effective hourly earnings of each worker under the new incentive plan; &
  • Does this incentive plan suits the company? Support you answer with logical reason not exceeding two lines.

 

Important Instructions:

 

1.   Your discussion must be based on logical facts.

2.   The GDB will remain open for 3 working days/ 72 hours.

3.   Do not copy or exchange your answer with other students.  Two identical / copied comments will be marked Zero (0) and may damage your grade in the course.

4.   Obnoxious or ignoble answer should be strictly avoided.

5.   Questions / queries related to the content of the GDB, which may be posted by the students on MDB or via e-mail, will not be replied till the due date of GDB is over.

Views: 2244

Replies to This Discussion

dear naiki karo tou pori karo plz share the three percentage how we slove it in the question

AoA, Dear here I tried my best to find a way out to get rid of this GDB :p 

Do'nt know upto which extent it will work but hope it can make some way.

Also something is better then nothing and little light better at night when no sun shines :p

CHeck and correct it please.

Attachments:

File is not open. Plz re upload.

 Sniper  ap ki file open nai hu rahi..

plz see this hope this file should be work .

Attachments:

its also not opening 

plz see this in Word .

Plz dont copy paste

Thanks

Attachments:

First we will calculate the Monthly Total amount:

 

Working Hours /day = 8

Wages / Hour = 300

No of days / month = 30

Total working hrs / month = 240

Total Amount / Month = 8 x 30 x 300 = 72000

-----------------------------------------------------------------  

To calculate the saved amount / Time

Total No. of Hrs / Day = 6

Wages / Hr = 300

No. of Days = 30

Total Amount = 6 x 30 x 300 = 54000

Total saved hrs / day = 2

Total saved hrs/ month = 60

Total saved amount = 2 x 60 x 300 = 18000

Total working hrs / month = 180

------------------------------------------------------------------

To calculate the Bonus Amount

Total amount save = 72000 – 52000 = 18000

 

* To calculate the 40% of 20 % of total time saved

  20 % of 18000 = 18000 x .20 = 3600

40 % of 20 % will be 3600 x .40 = 1440

 

* To calculate the 25 %of next 30%

18000 – 3600 = 14400 ( Means 80 % 0f 18000 )

First we will calculate 30 % of 14400

14400 x .30 = 4320

Now 25 % 0f 4320 will be

4320 x .25 = 1080

 

* 15% of remaining 50 % will be as

 

14400 – 4320 ( means 80% of 18000 – Next 30 % ) = 10080

 

180080 x .15 = 1512

 

Total amount of Bonus will be = 1440 +1080+1512 = 4032

 

Bonus / hr will be = total bonus amount / Total time saved

4032 / 60 = 67.2 / hr

 

 

Q:1 Determine effective hourly earnings of each worker under the new incentive plan

 

To calculate amount / hour

Total Amount Paid per month / Total no of hrs = 54000 / 240 = 225

 

Amount per hr will be

Amount / hr + Bonus amount / hr = 225 + 67.2 = 292.2

 

Q2: Does this incentive plan suits the company ?

 

Yes because company was pay 300 / hr, now they are paying 292.2 / hr

Aamir Bashir gud keep it up

Don’t Copy its my own solution

Requirement # 01
Special Wages Rate = 300 Rs. Per worker per hour
Working Hours = 8 Hours a day
No. of Days = 30

Total Working Hours = 30 x 8 = 240
Per day earning of worker = 300 x 8 = 2400
Total Time Saved
Time saved per day = 8-6 = 2 Hours
Work time per day = 6
Time saved per day earning = (6 x 300) = 1800

Total time saved = 2 Hours daily x 30 days = 60 Hours
Total time saved of 20% = 60 x 20% = 12
40% of 20% of the total time saved = 40% x 12 x 300 = 1440

30% of the total time saved = 60 x 30% = 18
25% of the next 30% of the total time saved = 25% x 18 x 300 = 1350

15% of the remaining time saved = 15% (60-12-18) x 300 = 4.5 x 300 = 1350

Total Saved time per day earning = 1800 + 1440 + 1350 + 1350 = 5940
Effective hourly earnings per worker per hour = Total Earning/ Effective working Hours

5940 = 990 Answer
6
Requirement # 02
No, the incentive plan does not suits the company as under the new plan time saving occurs but effective hourly earning becomes very high i.e. 990 as compared to per hour earning of 300.

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