An employee at CellWorld who produces 10 phone components in an hour earns $9 ($0.90 ×10) per hour, while another employee who produces 15 components earns $13.50 ($0.90 ×15). This is an example of a
A) commission plan.
B) differential piece rate plan.
C) direct commission plan.
D) profit-sharing plan.
E) straight piecework plan.

Question

Quizplus · Accepted Answer

This is an example of a straight piecework plan where employees are paid a fixed rate per unit produced, in this case, $0.90 per component.

An Employee at CellWorld Who Produces 10 Phone Components in an Hour