An organization uses Scanlon plan to provide incentives to employees. The workers produce parts worth $5 million. The target ratio set by the organization is 30%. The employees will be given a bonus if the actual labor costs are less than: Question 46 options: A) $0.5 million B) $1 million C) $1.5 million D) $2 million E) $2.5 million

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Business

Rowan Avery

22 May, 16:19

An organization uses Scanlon plan to provide incentives to employees. The workers produce parts worth $5 million. The target ratio set by the organization is 30%. The employees will be given a bonus if the actual labor costs are less than: Question 46 options: A) $0.5 million B) $1 million C) $1.5 million D) $2 million E) $2.5 million

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Answers (1)

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Ezekiel Fuller · Answer 1

C) $1.5 million

Explanation:

The Scanlon plan is used in the organization to determined a bonus to the employees if the ratio of labor costs to the total sales is below a set standard.

In this case the standard setting is 30% of $5 million sales, which indicates that the objective to the employees is to reach a labor cost less than $1,5 million.