Question

Larry produced 40 pressed inner fenders out of sheet metal per hour and got paid $24 per hour ($0.60 x 40) but michelle only produced 30 inner fenders per hour and got paid $18.00 ($0.60 x 30). what type of compensation program are larry and michelle working under?

Answer 1

this type of method is called straight price method. according to this method compensation will be decided based upon the amount of production. In this case if the total amount of pressed inner fenders produced by Larry is higher than michelle. so he is paid more.