Question

Choose the method of pay that would result in the most earnings for one month on sales of $60,000.

Answer 1

$ 60000

Here I will the calculations for the four options. You will be able to tell the which is the highest earnings

a.
Straight commission of 6% on all sales.

6% * 60,000 = 6*60,000/100 = 3,600

b.
Monthly salary of $1,500 plus 3% commission on all sales.

1,500 + 3%*60,000 = 1500 + 3*60,000/100 = 1,500 + 1,800 = 3,300
 
c.
Graduated commission of 4% on the first $50,000 in sales and 10% on anything over that.

4%*50,000 + 10%*[60,000 - 50,000] = 4*50,000/100 + 10*10,000/100 = 2,000 + 1,000 = 3,000
 
d.
Graduated commission of 5% on the first $40,000 in sales and 9% on anything over that.

4%*40,000 + 9%*[60,000 - 40,000] = 1,600 + 1,800 = 3,400