A salesman with an annual base salary of 30000 gets a 6 comm

A salesman with an annual base salary of $30,000 gets a 6% commission on the first $600,000 in sales, a 7% commission on the next $300,000, and 8% on sales above $900,000, what would be his total compensation for the year if he sold $1 million of product?

Solution

Ans :  $ 95000

Explanation:

Commission earned on the first $600,000 in sales = 6 % of $ 600,000 = $ 36000

Commission earned on the next $300,000 in sales = 7 % of $ 300,000 = $ 21000

8 % Commission earned on sales above $900,000 in sales.

Here total sales = $1000000 or 1 million

So total sales amount above $ 900000 = $1000000 - $ 900000 = $ 100000

Then , 8 % Commission earned on sales above $900,000 that is $ 100000 in sales = 8 % of $ 100000 = $ 8000

Total compensation for the year = Annual base salary + Total commission earned on sales of $ 1000,000

= $30000 + ( $ 36000 + $ 21000 + $ 8000 )

= $ 30000 + $ 65000

= $ 95000