A business employs 20 workers as production staff. Each worker is employed for 40 hours per week at a rate of $7.80 per hour.
Bonus is calculated at 20% of basic rate pay per hour for each product manufactured above 120 units per employee.
In a week, each employee produced 145 units.
What were the total wages for the week?

Q: What topic does this question test?

This question tests Costing Principles (Direct Costs / Labour Cost Calculation) in A-Level Accounting (syllabus code 9706). It is worth 1 mark.

Q: Which exam paper is this question from?

This question appeared in the Cambridge A-Level Accounting Oct/Nov 2021 examination, Paper 1 Variant 2 (9706_w21_qp_12.pdf).

Question

A business employs 20 workers as production staff. Each worker is employed for 40 hours per week at a rate of $7.80 per hour.
Bonus is calculated at 20% of basic rate pay per hour for each product manufactured above 120 units per employee.
In a week, each employee produced 145 units.
What were the total wages for the week?

Oracle Prep · Accepted Answer

The correct answer is A: $7020.

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