Question

Choose the method of pay that would result in the most earnings for one month on sales of $40,000. A. Straight commission of 7. 5% on all sales. B. Monthly salary of $1,600 plus 2. 5% commission on all sales. C. Graduated commission of 5% on the first $30,000 in sales and 6% on anything over that. D. Graduated commission of 4% on the first $25,000 in sales and 8% on anything over that. Please select the best answer from the choices provided A B C D.

Answer 1

The method of pay that would result in the most earnings is method 1.

What method of pay would result in the most earnings?

In order to determine which method of pay would yield the highest earnings, the total amount that would be earned using each method of pay has to be determined.

Method A = 7.5% x $40,000 = $3000

Method B = $1600 + (2.5% x $40,000) = $2,600

Method C = (5% x $30,000) + (6% x 10,000) = $2,100

Method D = (4% x $25,000) + (8% x $15,000) = $2,200

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