Gross Earnings: Piecework and Commissions Section 6.2.

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Presentation transcript:

Gross Earnings: Piecework and Commissions Section 6.2

Piecework Piecework Rate: pays an employee a given amount per item produced. (no regard to time) Gross Earnings = pay per item x # of items EX: A production worker is paid $0.58 for assembling a lamp, $1.23 for a ceiling fan, and $0.86 for a box fan. One week, a worker assembled 220 lamps, 318 ceiling fans, and 174 box fans. Find the worker’s gross earnings.

Gross Earnings for Differential Piecework The pay per item is dependent of the number of items produced. (The pay increases with # produced as an incentive.) EX: Scooter Frame Co. pays welders as shown. Find the gross earnings of a welder who welds 282 frames. 1 – 150 Frames$2.85 each 151 – 250 Frames$3.20 each Over 251 Frames$3.45 each

Another example: Find the daily gross earnings for an employee who picks 907 avocados. Avocado pickers are paid as follows: 1 – 500 Avocados$0.05 each 501 – 700 Avocados$0.07 each Over 700 Avocados$0.09 each

Gross Pay for Piecework with a guaranteed hourly wage The worker can earn an hourly wage or piecework pay, whichever is more. EX: A cabinet door finisher is paid $14.70 per hour for an 8-hour day, or $0.95 per cabinet door finished, whichever is higher. Find the gross earnings: DAYMonTuesWedThursFri # of Doors

Overtime Earnings for Piecework Time and a half is paid on the piecework rate for Overtime! Ex: An assembler is paid $0.84 for each child car seat assembled. During a recent week, she assembled 400 seats on regular time and 138 car seats during OT hours. If time and a half is paid for each OT assembly, find the gross earnings per week.

Gross Earnings for Commission Gross Earnings = Commission Rate (%) x Sales Note: any returns and allowances must be deducted from sales before you multiply! Ex: A salesperson had sales of $45,350 one month, with returns and allowances of $432. If the commission rate is 18%, find the gross earnings.

Variable commission rate Sliding scale is designed to be an incentive to get more sales. Find the correct rate based on sales, then multiply. EX: Timmy sells office copiers to businesses and is paid a variable commission rate. Find the gross pay if sales are $28,400. SalesCommissionRate First $10,0002% Second $10,0002.5% Over $20,0003%

Another Example Fire Fighting Equipment pay salespeople as follows: 6% on the first $7500 in sales, 8% on the next $7500 in sales, and 10% on any sales over $15,000. Find the gross pay for a person with $25,860 in sales.