Under a Modified Wage Plan,Jim Phillips Works an Eight-Hour Day

question 51

Multiple Choice

Under a modified wage plan,Jim Phillips works an eight-hour day and earns $.50 for each finished unit he produces in excess of 200 units.However,he is guaranteed $12.50 per hour as a minimum wage.His production this week was as follows: What were Jim's total earnings this week?

• A)$500
• B)$510
• C)$495
• D)$515

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Definitions:

Controllable Margin

The portion of income that can be directly influenced by management decisions, excluding fixed costs and uncontrollable expenses.

Operating Assets

Assets used by a business in its daily operations to generate revenue, excluding investment and non-operational assets.

ROI

Return on Investment, a performance measure used to evaluate the efficiency of an investment or compare the efficiency of different investments.

Contribution Margin

The difference between sales revenue and variable costs, indicating how much revenue contributes to covering fixed costs and generating profit.