Columbia Builders Hardware Supply pays all sales representatives 6% commission on the first $40,000 of their individual sales and 11% commission on their individual sales in excess of $40,000. Assume that Kevin Hill sold merchandise valued at $37,500 during the month of November.Calculate the following amounts.(a) Commission on sales in the sales base: $(b) Commission on additional sales: $(c) Gross pay:
Question
Columbia Builders Hardware Supply pays all sales representatives 6% commission on the first 40,000. Assume that Kevin Hill sold merchandise valued at (b) Commission on additional sales: $(c) Gross pay:
Solution
(a) Commission on sales in the sales base: Since Kevin Hill sold merchandise valued at 40,000, the entire amount falls into the base commission rate of 6%.
To calculate this, multiply the total sales by the commission rate:
2,250
So, the commission on sales in the sales base is $2,250.
(b) Commission on additional sales: Since Kevin Hill did not sell more than 0.
(c) Gross pay: The gross pay is the sum of the base commission and the additional commission. In this case, it is 0 = $2,250.
So, Kevin Hill's gross pay for the month of November is $2,250.
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