Question

Choose the method of pay that would result in the most earnings for one month on sales of $60,000.
a.
Straight commission of 6% on all sales.
b.
Monthly salary of $1,500 plus 3% commission on all sales.
c.
Graduated commission of 4% on the first $50,000 in sales and 10% on anything over that.
d.
Graduated commission of 5% on the first $40,000 in sales and 9% on anything over that.

Answer 1

Compute each:

a. 6% of $60,000 = $3,600
b. $1,500 + 3% of $60,000 = $1,500 + $1,800 = $3,300
c. 4% of $50,000 = $2,000; 10% of $10,000 = $1,000; total = $3,000
d. 5% of $40,000 = $2,000; 9% of $20,000 = $1,800; total = $3,800

Highest is d ( $3,800 ).