Question
The workers inform the manager of their refusal to accept a pay of 0.08 per baguette. Their argument is as follows: Even if we work
The workers inform the manager of their refusal to accept a pay of 0.08 per baguette. Their argument is as follows: "Even if we work at full capacity, that is to say 30,000 baguettes per month, we can earn, at most 2,400, that is to say, the same as we are guaranteed to earn with the fixed price pay scheme. We will accept to be paid a rate of 0.10 per baguette, which allows us at full capacity to earn 3,000, which offsets the risk we take for potential lower production and therefore lower salary. " The manager defers his answer and asks you, as the controller, to recalculate the operating profit for April in this case.
Given the results provided by the controller, the manager will make a counter-proposal to the employees and asks you to specify to him at what price per baguette he can go up to in the negotiation, so that the operating profit does not fall below that previously made under the fixed pay scheme (as per the operating profit in question 2). What price can do you advise to negotiate to?
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