Joel has been offered sales positions at two different companies. AlphaCO offers an annual salary of 65,000 omegaCO offers an annual salary of 42,500 plus a 3% commission on sales.
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Joel has been offered sales positions at two different companies. AlphaCO offers an annual salary of 65,000 omegaCO offers an annual salary of 42,500 plus a 3% commission on sales.
To compare the two offers, we need to consider Joel's potential earnings at omegaCO based on different sales scenarios.
Let's take three different sales scenarios:
1. Low Sales Scenario: Suppose Joel makes $100,000 in sales.
In this case, his earnings at omegaCO would be:
Annual Salary + Commission = $42,500 + ($100,000 * 0.03) = $42,500 + $3,000 = $45,500
2. Average Sales Scenario: Suppose Joel makes $200,000 in sales.
In this case, his earnings at omegaCO would be:
Annual Salary + Commission = $42,500 + ($200,000 * 0.03) = $42,500 + $6,000 = $48,500
3. High Sales Scenario: Suppose Joel makes $300,000 in sales.
In this case, his earnings at omegaCO would be:
Annual Salary + Commission = $42,500 + ($300,000 * 0.03) = $42,500 + $9,000 = $51,500
Comparing the two offers:
At AlphaCO, Joel would earn a fixed annual salary of $65,000.
At omegaCO, Joel's earnings would vary based on sales, but they could range from $45,500 to $51,500 based on the different sales scenarios.
Based on these scenarios, Joel would earn more at omegaCO if his sales exceed $154,167 (i.e., the point at which the commission-based earnings exceed the fixed salary at AlphaCO).
Let's take three different sales scenarios:
1. Low Sales Scenario: Suppose Joel makes $100,000 in sales.
In this case, his earnings at omegaCO would be:
Annual Salary + Commission = $42,500 + ($100,000 * 0.03) = $42,500 + $3,000 = $45,500
2. Average Sales Scenario: Suppose Joel makes $200,000 in sales.
In this case, his earnings at omegaCO would be:
Annual Salary + Commission = $42,500 + ($200,000 * 0.03) = $42,500 + $6,000 = $48,500
3. High Sales Scenario: Suppose Joel makes $300,000 in sales.
In this case, his earnings at omegaCO would be:
Annual Salary + Commission = $42,500 + ($300,000 * 0.03) = $42,500 + $9,000 = $51,500
Comparing the two offers:
At AlphaCO, Joel would earn a fixed annual salary of $65,000.
At omegaCO, Joel's earnings would vary based on sales, but they could range from $45,500 to $51,500 based on the different sales scenarios.
Based on these scenarios, Joel would earn more at omegaCO if his sales exceed $154,167 (i.e., the point at which the commission-based earnings exceed the fixed salary at AlphaCO).