Under a Modified Wage Plan,an Employee Earns $1

question 17

Multiple Choice

Under a modified wage plan,an employee earns $1.55 for each finished unit and is guaranteed $18 per hour as a minimum wage.If the daily quota is 96 units,on a particular day when an employee completes 90 units and works 8 hours,the amount of the make-up guarantee will be:

• A)$18.00
• B)$9.00
• C)$4.50
• D)$13.50

---

Definitions:

Variable Production Costs

Costs that vary directly with the level of production output, such as raw materials and labor costs.

Sales Commissions

Fees paid to sales representatives as a percentage of the sales they generate.

Traceable Fixed Advertising

Fixed advertising costs that can be directly linked to a specific product, segment, or area of the business.

Contribution Margin

The difference between sales revenue and variable costs of a product or service, used to cover fixed costs and generate profit.