Answer: cost of one unit = $280
Question:
A salesman has a base salary $2600 per month and makes 3% commission on each unit sold. If his total annual compensation is $48,000 and he sold 2000 units, how much does each unit cost
Step-by-step explanation:
Given;
base salary = $2600 per month
Total annual compensation = $48,000 per annum
Number of units sold = 2000
Commission = 3% per unit
Salesman's Salary per annum = $2600 × 12 = $31,200
Total commission earned = total compensation - total yearly salary
Total commission = $48,000 - $31,200 = $16,800
Commission on each unit = total commission/number of units
Unit commission = $16800/2000 = $8.4
Given that the commission per unit is 3% per unit
That is $8.4 is 3% of the cost of each unit.
Cost of each unit = $8.4/3% = $8.4/0.03 = $280
