185
EXERCISE 18
GAINSHARING AT OLYMPIA CENTRAL SERVICES
SCANLON PLAN
Base Period Calculation
Ratio = Payroll (Labor) Costs for Base Period
Sales for Base Period
= $ 7,656,250 = .625
$12,250,500
Bonus Period Calculation
Sales Value of Production = $1,531,250
Bonus Period Allowed Labor Cost = Bonus Period Sales Value of Production * Ratio
Mary Jane’s Bonus
Mary Jane’s Pay as Percentage of
Total Payroll = $ 1,154 = .00166
$696,245
Mary Jane’s Share of Bonus Pool = $130,393 * .00166 = $216.45
Mary Jane’s Bonus as % of her = $ 216.45 = .1876 (18.76 percent)
Monthly Pay $1,154.00
186
RUCKER PLAN
Base Period Calculation
Sales Value of Production (SVP) = $12,250,500
Economic Productivity Index
(EPI) = 1.000 = 1.000 = 1.52
LCVA .658
Bonus Period Calculation
SVP = $1,531,250
COM = $ 76,200
COL = $ 696,245
VA = $1,531,250 – $76,200 = $1,455,050
Actual Value of Production (AVP) = SVP – (COM + COL)
187
RUCKER PLAN—continued
Mary Jane’s Percentage Share of = Mary Jane’s earnings (bonus period)
Bonus Pool Total Payroll (bonus period)
IMPROSHARE
Base Period Calculation
Base Period Labor Force
(per employee) = 438
Base Period Hours Worked = 2,000 * 438 = 876,000
Base Period Units Produced = 155,000,000
Total SV Sales Order Hours = .016 * 5,000,000 = 80,000
Total SV Output Hours = 240,000 + 80,000 = 320,000
Base Productivity Factor (BPF) = Total Hours Worked
Total Standard Value Hours
= 438 * 2000 = 2.738
189
IMPROSHARE—continued
Total Improshare Hours During Bonus Period
Credit Cards = SV (Credit Cards)
* Units Produced * BPF
.0016 x 19,600,000 x 2.738 = 85,864
Sales Orders = SV (Sales Orders) *
Units Produced * BPF
.016 * 580,000 * 2.738 = 25,409
Total Improshare Hours = 85,864 + 25,409 = 111,273