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Gross Earnings: Piecework-Math with Business Applications, Payroll Unit - YouTube
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[4]
In this section,
we'll take a look
[6]
at piecework and commissions.
[9]
Salaries and wages are
time rates because
[14]
they depend only on
[16]
the actual time an
employees on the job.
[19]
The methods described in
[21]
this section are incentive
rates because they're
[24]
based on production
and pay an employee
[26]
for actual performance
on the job.
[30]
They can be piecework
or commission.
[34]
A piecework rate pays an employee
[37]
a given amount per item produced.
[40]
Gross earnings are
found by taking
[43]
the pay per item times
the number of items.
[49]
For example, for
every bike assembled,
[54]
an individual would receive $20.
[59]
If they assembled six bikes,
[63]
their earnings would be $120.
[68]
Another example here states that
[71]
truck drivers are typically
[73]
paid based on the
number of miles driven.
[76]
The pay for a truck
driver who logs
[78]
588 miles at a pay rate of
38 cents per mile would
[82]
be 38 cents per mile times the
[86]
588 miles for a gross
earnings of $223.44.
[93]
Piecework employees,
like other workers,
[96]
are paid time and a
half for overtime.
[99]
It's common for the
overtime rate to be
[102]
one-and-a-half times the
regular rate per piece.
[108]
Regular pay rate in this
example is $20 per bicycle,
[114]
time-and-a-half would be 20
times 1.5 or $30 per bicycle.
[122]
Here we have an example
given an assembler is paid
[126]
84 cents per each child
car seat assembled.
[131]
In a week, 400 car
seats were made on
[134]
regular time and 138
were made on overtime.
[137]
They're asking us to compute
[139]
the gross earnings
for this worker.
[142]
The regular pay is 84
cents per car seat,
[146]
and during regular time,
they assembled 400.
[149]
Multiplying 84 times 400 gives
us a straight pay of $336.
[155]
During overtime, we need to take
[159]
our regular assembly or
[162]
piecework rate of 84 cents
times one-and-a-half,
[166]
which gives us a $1.26 percent.
[169]
Then to determine,
the overtime pay,
[171]
we'll take a $1.26
times the number of
[174]
seats assembled during
overtime for overtime pay.
[179]
We'll add those two together to
[182]
give us the gross earnings
for this individual.
[188]
There are many variations to
[191]
the straight piece
rate just described.
[194]
For example, some rates have
quotas that must be met with
[199]
a premium for each item
produced beyond the quota.
[204]
These plans offer
[205]
an additive incentive
within an incentive.
[209]
A typical differential
piece rate plan is where
[213]
the rate paid per item
[216]
depends on the number
of items produced.
[219]
Here we have an example,
[221]
for the first 60
boxes an individual
[225]
receives a piecework rate
of 80 cents per box.
[229]
Once they hit the 60,
[232]
the incentive is for
the next 20 boxes,
[235]
61-80 boxes, they're going
[237]
to receive an
additional 10 cents,
[239]
in other words, 90 cents per box.
[242]
Once they meet the 80,
[246]
any boxes produced over 80
[249]
is at the highest rate
of a $1.10 per box.
[254]
So our quota is the
minimum 60 boxes
[257]
at the lowest piecework rate,
[261]
anything beyond the minimum of
[264]
60 boxes is going to be at a
premium or incentive rate.
[269]
As an example, they're asking
us to find the pay for
[272]
an employee who fills 84 boxes.
[275]
We've got a graph to
represent what's happening.
[280]
When we put the
production of 84 boxes,
[284]
it means they've
produced a given 60,
[287]
84 minus 60 means we
[290]
have 24 that are going to
be paid at the higher rate.
[294]
There are 20 boxes,
[296]
80 minus 60, there
are 20 boxes in this,
[301]
beyond 60 and up to
[304]
80 that are going to be
paid at 90 cents per box.
[308]
Well, that would be 20 of the
remaining 24 and it would
[314]
leave the last four to be paid
[318]
at this higher beyond
80 box production,
[322]
in other words, 81 or
[324]
greater is going to be
paid at this higher rate.
[327]
So to calculate the pay,
[329]
we have 60 boxes at the
quota rate of 80 cents,
[334]
the first incentive for
[336]
the next 20 boxes is
paid at 90 cents,
[339]
and when you add
your 60, 20, and 4,
[344]
for the total of 84
boxes and the top
[347]
four at this highest
incentive rate of a $1.10,
[351]
gives us 440, add
[353]
those three amounts to
[355]
determine the pay
for this individual.
[359]
Here we have another
example from the textbook.
[363]
Scooter Frame
Company pays welders
[365]
as follows: They have a quota of
[367]
150 frames at this piece
rate or piecework rate,
[372]
the next 100 are
[375]
paid at 3.20 each at
the first incentive,
[378]
and anything over 250 is
paid at this highest.
[381]
They're asking us to find the
gross earnings for a worker
[384]
who welds 282 frames.
[388]
They're well in this
top incentive range.
[391]
So again, to help us see
where those values are,
[395]
they met their quota of 150,
[399]
the next 100, in other
words, up to 250.
[403]
If we subtract off
our quota of 150,
[408]
we have 100 that are at
[411]
this first incentive level
and they had a total of 282,
[417]
and we're up at 250 now.
[419]
So taking 250,
[422]
the quota and the first
incentive away from 282,
[427]
means there are 32 at
that top tier of 3.45,
[435]
multiply each of these,
[437]
add the earnings for a
gross earnings of $857.90.
[446]
The piecework in
differential piece
[449]
where grades are frequently
[450]
modified to include a
guaranteed hourly pay rate.
[454]
This is often
necessary to satisfy
[457]
federal and state laws
concerning minimum wages.
[460]
With this method, the
employer must pay
[464]
either the minimum wage or
[465]
the piecework earnings,
whichever is higher.
[469]
Let's take a look at an example.
[472]
A cabinet door finisher is paid
[474]
$14.70 per hour for
an eight hour day,
[478]
or 95 cents per cabinet
door, whichever is higher.
[483]
So we need to determine which is
[487]
the highest pay for
each one of these days.
[491]
So for a minimum,
[493]
$14.70 per hour for
an eight hour day,
[498]
at the very least,
[500]
this worker will earn $117.60,
[504]
that's using the minimum
or guaranteed hourly wage.
[509]
Let's look and see what
the worker is going to
[513]
receive if we calculate
the piecework rate.
[517]
At 95 cents per door on Monday,
[521]
his piecework rate is
[523]
less than the minimum
[525]
daily or the guaranteed
hourly wage,
[527]
so he would receive the $117.60,
[533]
but on Tuesday, produce
more doors at 95 cents,
[537]
his piecework rate is
higher than the minimum.
[542]
So that would be the
amount here for that day.
[544]
You can see on Wednesday,
[546]
there's more doors than Tuesday,
[547]
so he's above the minimum.
[550]
Thursday dropped off and
was below the minimum,
[553]
so this would be the
higher pay for Thursday,
[557]
and on Friday, he's
above the minimum again.
[559]
So we cross out Monday,
[561]
he or she will receive
[564]
the minimum guaranteed hourly
wage same as with Thursday,
[570]
and for Tuesday,
Wednesday, and Friday,
[574]
we'll use the piecework,
[576]
which is the higher amount,
[577]
and add the highlighted wages
[582]
there to determine
[583]
the gross earnings
for this individual.
[585]
[NOISE] A commission rate
[591]
pays a salesperson
either a fixed percent
[595]
of sales or a fixed
amount per item sold.
[599]
Commissions are
designed to produce
[602]
maximum output from
the salesperson,
[604]
since pay is directly
dependent on sales.
[609]
With a straight commission,
[612]
the salesperson is paid a
fixed percent of sales,
[615]
and here we have a real
estate agent earn 6.5
[618]
percent commission rate on
all residential homes sold.
[622]
That means they would
receive six dollars
[626]
50 cents per $100 sold,
[629]
and that per 100 is
coming from the percent,
[633]
which means per 100.
[635]
Let's look at an example.
[637]
We have a real estate
agent who just
[639]
sold at $142,500 home,
[642]
her commission rate
is 5.25 percent.
[646]
So we're going to take that
rate, her commissioned rate,
[651]
times the house sale to
determine the commission.
[656]
So here would be her
earnings or his earnings,
[660]
I guess it is her earnings.
[662]
[LAUGHTER]
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