Question

Chris can be paid in one of two ways. Plan a Is a salary of 470 per month plus a comission of 8% sales. Plan b is 762 per month and 4% sales. For what amount of sales is Chris better off selecting plan a?

Answer 1

Step 1

Let s represent the total sales

and

Let M represent the monthly salary.

Step2

Equations for payment for each plan

$\begin{gathered} \text{Plan A payment =470 + 0.08s} \\ \text{Plan B payment = 762 + 0.04s} \end{gathered}$

Step 3

We solve for plan A > plan B

By substitution

$\begin{gathered} 470\text{ + 0.08s > 762 + 0.04s} \\ 0.08s\text{ - 0.04s > 76}2-470 \\ 0.04s\text{ > }292 \\ \frac{0.04s}{0.04}>\frac{292}{0.04} \\ s\text{ > 7300} \end{gathered}$

Hence, for sales greater than $7,300 per month, Chris is better off selecting plan A.