Question

In the example below, if the current year's labor costs were $700,000, how would your answer change? Explain your answer step by step.

"Your company decided to implement a Rucker plan. For the base year, the sales revenue is $54 million, and the cost of raw material and services was $32 million. The labor costs for the base year was $4 million. The following year, the sales revenue was $88 million and cost of raw materials and services was $73 million, and the labor costs were $7 million. Assuming that the company is planning to distribute 50% of any cost savings to employees. The company has 100 production employees, and the firm has decided that the gain sharing plan would involve equal pay to all workers. What would be the amount available to take home for each employee?"

Answer 1