Plan 'A' total compensation = x plan 'B' total compensation = y let z = total sales x = 500 + 0.04z y = 400 + 0.05z the better offer DEPENDS on the total sales that Kenisha makes the point at which the two plans are the same is found by making the x and y equal: 500 + 0.04z = 400 + 0.05z 100 = 0.01z z = 10,000 so if Kenisha sells EXACTLY $10,000 per month both plans give her the same compensation so no plan is "better" if Kenisha sells LESS than $10,000 per month, then plan 'A' is "better" for her in terms of compensation. That is because the $100 that she gains on the base salary from plan 'A' is bigger than the 1% sales commission she loses on total sales (which is less than $10,000) if Kenisha sells MORE than $10,000 per month, then plan 'B' is "better" for her in terms of compensation. That is because the extra 1% sales commission she makes on total sales (which is more than $10,000) is more than the $100 loss she takes on the base salary amount.
