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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 10,000oftheirindividualsalesand1110,000 of their individual sales and 11% commission on their individual sales in excess of 10,000. Assume that Alice Robinson sold merchandise valued at 72,500duringthemonthofDecember.Calculatethefollowingamounts.(a)Commissiononsalesinthesalesbase: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:

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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, 10,0006/100=10,000 * 6/100 = 600

(b) Commission on additional sales:

The additional sales are the sales in excess of 10,000.InAlicescase,thiswouldbe10,000. In Alice's case, this would be 72,500 (total sales) - 10,000(salesbase)=10,000 (sales base) = 62,500.

Alice's commission on this amount is calculated at 11%.

So, 62,50011/100=62,500 * 11/100 = 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, 600(commissiononsalesbase)+600 (commission on sales base) + 6,875 (commission on additional sales) = $7,475

Therefore, Alice's gross pay for the month of December is $7,475.

This problem has been solved

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