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Contemporary Mathematics for Busin...

8th Edition
Robert Brechner + 1 other
ISBN: 9781305585447

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BuyFindarrow_forward

Contemporary Mathematics for Busin...

8th Edition
Robert Brechner + 1 other
ISBN: 9781305585447
Textbook Problem

Pamela Mello is paid on an incremental commission schedule. She is paid 2.6% on the first $60,000 and 3.4% on any sales over $60,000. If her weekly sales volume was $89,400, what was her total commission?

To determine

To calculate: The Pamela Mello’s total commission, if her weekly sales volume is $89,400. She works on an incremental commission schedule and gets paid 2.6% on the first $60,000 and 3.4% on sales over $60,000.

Explanation

Given Information:

The provided sales volume is $89,400 and Pamela gets paid 2.6% on the first $60,000 and 3.4% on sales over $60,000.

Formula used:

To calculate gross pay by incremental commission:

Step 1. Calculate the pay at each level by multiplying the total sales and the commission rate for that level.

Level pay=Sales per level×Commission rate

Step 2. Calculate the total commission by adding the pays from each level.

Calculation:

As Pamela Mello’s sales volume is $89,400, commission rate is 2.6% for sales up to $60,000 and commission rate is 3.4% for sales more than $60,000,

So, she has commission rate 3.4% for sales of $89,400$60,000=$29,400.

Now to find her total commission first find her level wise pay,

To calculate level 1 pay, consider rate of commission and sales volume,

2.6% and $60,000

Apply the formula, Level pay=Sales per level×Commission rate:

Level 1 pay=$60,000×2.6%=$60,000×2.6100=$60,000×0.026

As,

     60,000×     0.026_360 0001200 00  _1,560.000__

So, Level 1 pay=$1,560

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