Calculate the Incentive Programs

1. Bonus. You have a salary of $46,000 per year, and you get a 7% bonus at year-end.

a. How much is your bonus?

2. Commission. You are an independent real estate agent in a rural area in the South, and you get a 5% commission on every house you sell. Your monthly expenses are around $10,000. This month you sold two houses: one for $168,000 and the other for $116,000.

a. How much revenue did you earn this month?

b. What was your profit for the month?

c. If this was an average month, what would be your profit for the year? (Your monthly expenses do not change. Assume that this case is based on the month of January.)

3. Merit pay. You are the top performer in your department, so you are getting a 2% merit raise over the 2% that everyone else will get.

a. How much is your merit pay if your current salary is $35,000?

4. Straight piece-rate. You make car parts. You get paid $1.10 for every part you make. This week you made 423 parts.

a. What is your pay for the week?

b. The estimated average pay is $450, so how much more or less than average did you make?

5. Differential piece-rate. You sell cell phones and phone service contracts in a small rural town. You are paid a salary of $7.50 per hour for a 40-hour week ($300) or $1,350 for the (180-hour) month. You also get paid $8.00 for every phone you sell in excess of five for the month. This month you sold 15 phones.

a. What is your total pay for the month?

6. Standard hour. You build transmissions. The standard time is 6 hours to rebuild one transmission. You are paid $25.00 per standard hour. During this 40-hour work week, you rebuild 8 transmissions.

a. What is your pay for the week?