Gainsharing examples handout

# Gainsharing examples handout - The company paid \$33,850,000...

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Scanlon Plan Example: Based on historic data, the average annual labor costs for a company are \$37,000,000. The average annual sales revenue is \$50,000,000, and the average value of goods held in inventory is \$24,000,000. What is the historic Scanlon Ratio for this company? For the month of January, 2007, labor costs equal \$2,900,000. Sales value of production for January was equal to \$7,250,000. Do employees receive a gain sharing bonus for January of 2007? If so, how much is available for distribution? Rucker Plan Example Looking at historic data for the year 2006, the average labor costs for a company equaled \$7,000,000. The company generated \$44,000,000 in sales.
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Unformatted text preview: The company paid \$33,850,000 for materials and supplies to make their products. What is the historic Rucker ratio for this company for 2006? For the month of January, 2007, total labor costs equaled \$550,000. The company made \$3,750,000 in sales revenue, and spent \$2,925,000 for materials and supplies. Do employees receive a gain sharing bonus for January of 2007? If so, how much is available for distribution? **Mistake in book Table 5.6 pg. 155. They multiply value added by the ratio to come up with necessary value added for a bonus. It should be labor costs multiplied by historical Rucker Ratio.**...
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