Managerial Accounting : Concepts and Empirical Evidence by Lawrence A. Gordon...

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UNION POINT SHEET ISSUE WEIGHT (W) OPTION POINTS VALUES (W*V) (V) 1000 0 160 0 ISSUE OPTIONS Location of the New Plant 16% 1. In Deloitte 2. Outside Deloitte Transfer of Workers 16% 1. A “no-layoff” policy: only workers that violated factory policy can be laid off (transferring all of the current workers 2. No “no-layoff” policy (workers have no guarantee of jobs at new facility) 1000 0 160 0 Operation of the New Plant 15% 1. 2. 3. 4. 5. Maintaining old target production level A 10% higher target production level A 15% higher target production level A 20% higher target production level A 25% higher target production level 1000 800 500 300 0 150 120 75 45 0 Guaranteed Annual Wage 15% 1. 2. 3. 4. 5. 14.69 13.69 12.69 11.69 10.69 1000 800 600 400 200 150 120 90 60 30 Group Incentive Program 12% 1. 2. 3. 4. 5. Incentives for production over target Incentives for the top 80% groups with over-target Incentive for the top 50% groups with over-target Incentive for the top 30% groups with over-target No incentive program 1000 900 600 300 0 120 108 72 36 0 Escalator Clause 10% 1. 2. 3. 4. Annual increase of wage based on CPI Biennial increase of wage based on CPI Triennial increase of wage based on CPI No escalator clause 1000 400 200 0 100 40 20 0 Annual Bonus 8% 1. Based on company’s profitability 2. No annual bonus 1000 0 80 0 Overtime 8% 100% 1. Paid overtime for over 40 hours/week 2. No paid overtime 1000 0 80 0 1000

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