Employees of Rockingham Enterprises work in groups of five, plus a group leader. Standard production for a group is 400 units for a 40-hour week. The workers are paid $6 an hour until production reaches 400 units; then a bonus of $1.20 per unit is paid for production over 400 units, with $1 being divided equally among the five workers and the remainder passing to the group leader (who is also paid a weekly salary of $300). Factory overhead is $7 per direct labor hour and includes the group leader's earnings. The production record of a group for one week shows:

Required:
(1) Compute the week's earnings of the group (excluding the leader), the labor cost per unit, the overhead cost per unit, and the conversion cost per unit, based upon the above data and bonus plan, and assuming the bonus is computed based on aggregate results for the week. Calculate unit costs to four decimal places.
(2) Prepare a schedule showing daily earnings of the group (excluding the leader), unit labor cost, unit overhead cost, and the conversion cost per unit, assuming that the company uses the group bonus plan as described in this chapter and assuming the bonus is computed for (a) the day and (b) the week.

Transcribed Image Text:

Hours Units Worked Produced 40 Monday Tuesday. Wednesday Thursday Friday 72 81 95 102 102