Question

Inez is compensated based on a plan that pays a base salary, with commission in addition. Inez receives $40,000/year salary (and is paid monthly); additionally, she receives 8% on all sales in excess of $50,000 in sales/month. In April, Inez sold $69,500 of product. Calculate her monthly earnings.

Answer 1

Answer:

$4,893.33

Explanation:

Inez's monthly earnings in April comprises of her monthly salary and the performance bonus which are both computed as shown below:

monthly salary=annual salary/12 months

annual salary

monthly salary=$40,000/12

monthly salary=$3,333.33

Note that the performance bonus is not based on the entire sales revenue generated by her but on the sales revenue above the threshold of $50,000

sales performance bonus=($69,500-$50,000)*8%

sales performance bonus=$1,560

monthly earnings=$3,333.33+$1,560

monthly earnings=$4,893.33