ACCA MA · Chapter 5 · Question 7 of 10
A differential piecework scheme pays $1.00 per unit for the first 500 units, $1.20 per unit for units 501 to 700, and $1.50 per unit for every unit above 700. Each rate applies only to units within its band. What is the pay for an output of 760 units?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) $830
Explanation
Pay = (500 x 1.00) + (200 x 1.20) + (60 x 1.50) = 500 + 240 + 90 = $830. Applying the top rate to all 760 units ($1,140) is wrong, because each rate applies only to the units in its own band.
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