Future Business Leaders of America (FBLA) Accounting Practice Test

What is the piece rate payment system?

1. Salary based on experience

2. A pay structure that rewards attendance

3. A method where an amount is paid for each piece produced

4. Hourly wage plus bonuses

The correct answer is: A method where an amount is paid for each piece produced

The piece rate payment system is characterized by compensating workers based on the amount of output they produce, specifically an amount paid for each piece produced. This method directly ties earnings to productivity, encouraging employees to work efficiently and increase their output, which can benefit both the worker and the employer. In this system, the more items an employee produces, the more they earn, providing a clear incentive for increased productivity. The other options do not relate to the piece rate system. Salary based on experience generally refers to a fixed wage that does not directly link to output. A pay structure that rewards attendance focuses on providing financial incentives for employees to be present at work rather than rewarding output. Lastly, an hourly wage plus bonuses incorporates a base pay and performance incentives but does not operate on a per-piece basis, distinguishing it from the piece rate payment system.