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The method of pay that would result in the most earnings is: Option d. graduated commission of 5% on the first $40,000 in sales and 9% on anything over that.
How to find the percentage from the total value?
Suppose the value of which a thing is expressed in percentage is "a'
Suppose the percent that considered thing is of "a" is b%
Then since percent shows per 100 (since cent means 100), thus we will first divide the whole part in 100 parts and then we multiply it with b so that we collect b items per 100 items(that is exactly what b per cent means).
Thus, that thing in number is
[tex]\dfrac{a}{100} \times b[/tex]
We're specified that:
- One month sales of $60,000 occurs.
Calculating the earnings from all the options:
- Option a: straight commission of 6% on all sales.
That means, we get:
Earning = 6% of 60,000 = [tex]\dfrac{60000}{100} \times 6 = 3600[/tex] (in dollars)
- Option b: monthly salary of $1,500 plus 3% commission on all sales.
That means:
Earning = 1500 + 3% of 60,000 = [tex]1500 +\dfrac{60000}{100} \times 3 = 1500 + 1800 = 3300[/tex] (in dollars).
- Option c : graduated commission of 4% on the first $50,000 in sales and 10% on anything over that
That means, we get:
Earning = 4% of 50,000 + 10% of 10,000 (as total 60,000 dollars sales was done).
Earning = [tex]\dfrac{50000}{100} \times 4 + \dfrac{10000}{100} \times 10 = 2000 + 1000 = 3000[/tex] (in dollars)
- Option d: graduated commission of 5% on the first $40,000 in sales and 9% on anything over that.
That means:
Earning = 5% of 40,000 + 9% of 20,000 (as 40000 + 20000 = 60000)
or, we get:
Earning = [tex]\dfrac{40000}{100} \times 5 + \dfrac{20000}{100} \times 9 = 2000 + 1800 = 3800[/tex] (in dollars).
Thus, option D provides the method for max earning.
Thus, the method of pay that would result in the most earnings is: Option d. graduated commission of 5% on the first $40,000 in sales and 9% on anything over that.
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