Question

Question 10 (36 minutes) Supplementary Exam 2016

Moses has been employed as an artisan at ABC Manufacturers Ltd where he is responsible for making customized couches. Before he joined ABC Manufacturers Ltd, he resigned as an artisan from XYZ Manufacturers Ltd in order to go for green pastures. Ideally, I love the type of work I am doing as an artisan, therefore, I expect a better pay in return. Moses said.

Mr Pieter is Moses’ current supervisor. He informed Moses that the company expects nothing but thevery best from him because of the type of customers that the company deals with. We are glad that

you have joined our dynamic team; however, I should inform you that ‘customer satisfaction’ is our firstpriority. Therefore, as an artisan, we expect you to make high quality customized couches - the supervisor warns Moses.

Currently, the company is using the Halsey method - wage incentive scheme as a way of calculating bonuses for its employees. However, it contemplates to move to the Rowan premium bonus system as it is perceived to be more flexible yet less costly in operation.

Moses works only from Monday to Friday. The company does not operate during weekends and public holidays. His clock card reads as follows during the week ended 19 February 2016:

Standard time per day

Hourly rate

Standard production output

Additional information:

Number of customized couches manufactured

Actual hours worked during the week

Required:

: 8 hours
: N$ 75.00
: 2 couches per hour

: 75 couches : 35 hours

Marks

10.1. Determine Moses’ Gross pay using the current remuneration scheme 6

10.2. Compute Moses’ Gross pay using Rowan premium bonus system 6

10.3. Comment on Moses’ productivity and efficiency 3

10.4. How many couches would have been produced per week had Moses 3 adhered to the standard production requirements?

10.5. Of the two schemes, which one would you recommend to the company, and 2

Answer 1