Question

Choose the method of pay that would result in the most earnings for one month on sales of $73,620. a. Straight commission of 6% on all sales. b. Monthly salary of $3,000 plus 2% commission on all sales. c. Graduated commission of 4% on the first $50,000 in sales and 9% on anything over that. d. Graduated commission of 5% on the first $35,000 in sales and 7% on anything over that.

Answer 1

A. 0.06(73,620) = 4417.20 pay on straight commission of 6%
b. 3000 + 0.02(73,620) = 3000 + 1472.40 = 4472.40 (salary + 2% com)
c. 0.04(50,000) + 0.09(73620 - 50,000) = 2000 + 2125.80 = 4125.80
d. 0.05(35,000) + 0.07(73620 - 35,000) = 1750 + 2703.40 = 4453.40

most earnings would be : B. monthly salary + 2% commission