Jensen Office Equipment pays all sales representatives 6% commission on the first $10,000 of their individual sales and 11% commission on their individual sales in excess of $10,000. Assume that Alice Robinson sold merchandise valued at $72,500 during the month of December.Calculate the following amounts.(a) Commission on sales in the sales base: $(b) Commission on additional sales: $(c) Gross pay:
Question
Jensen Office Equipment pays all sales representatives 6% commission on the first 10,000. Assume that Alice Robinson sold merchandise valued at (b) Commission on additional sales: $(c) Gross pay:
Solution
(a) Commission on sales in the sales base:
The sales base is the first $10,000 of individual sales. Alice's commission on this amount is calculated at 6%.
So, 600
(b) Commission on additional sales:
The additional sales are the sales in excess of 72,500 (total sales) - 62,500.
Alice's commission on this amount is calculated at 11%.
So, 6,875
(c) Gross pay:
Alice's gross pay is the sum of the commission on the sales base and the commission on additional sales.
So, 6,875 (commission on additional sales) = $7,475
Therefore, Alice's gross pay for the month of December is $7,475.
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