Question

You are offered two different sales jobs. The first company offers a straight commission of 3% of the sales. The second company offers a salary of $ 260 per week plus 2% of the sales. How much would you have to sell in a week in order for the straight commission offer to be at least as good?

Answer 1

Let's use the variable x to represent the sales in a week.

In the first company, the total payment is 3% of x, that is, 0.03x

In the second company, the total payment is $260 plus 2% of x, that is, 260 + 0.02x.

The value of x that makes both options be equally good (same payment) is:

$\begin{gathered} 0.03x=260+0.02x \\ 0.03x-0.02x=260 \\ 0.01x=260 \\ x=26000 \end{gathered}$

Therefore the sales should be $26,000.