| 30 March |
Becky is a manufacturer’s representative selling home theatre systems to businesses. Under her contract, she r? |
Becky is a manufacturer’s representative selling home theatre systems to businesses. Under her contract, she receives a monthly salary of $2,400 plus a 2.40% commission on sales exceeding her quota of $200,000 per month.
a) What are her earnings for a month in which she hypothetically has $270,000 in sales? For full marks your answer(s) should be rounded to the nearest cent.
b) If on the course of the first year of employment her average monthly sales are $275,000, what straight commission rate would generate the same average monthly earnings as she gets from her contract? Note: Please make sure your final answer(s) are in percentage form and are accurate to 2 decimal places. For example 34.56%
a) What are her earnings for a month in which she hypothetically has $270,000 in sales?
Becky’s earnings = 2400 + 0.024(270000 – 200000)
= 2400 + 1680 = $4080.00
b) If on the course of the first year of employment her average monthly sales are $275,000, what straight commission rate would generate the same average monthly earnings as she gets from her contract?
Under the contract, her earnings = 2400 + 0.024(275000 – 200000)
= 2400 + 1800 = 4200
Straight commission rate = 4200/275000 x 100 = 1.52727
rounded to 1.53%