Calculate salary plus commission. Gene Jordan receives a salary of $440 per week plus 18% commission...

Calculate salary plus commission.

Gene Jordan receives a salary of $440 per week plus 18% commission on all net sales over $2,800. Gene's total sales last week were $5,500. Returned sales were $1,250. What would Gene's gross earnings have been if there were no returned sales?

Expert Solution

Solution:
	Gene's gross earnings have been if there were no returned sales	$926


Working Notes:
	If there were no returned sales , then Gene's sales for computation of commission , will be considered Total sales of $5,500


	Gene's gross earnings = Weekly salary + commission
	Gene's gross earnings = $440 + 18% x (total sales - target)
	Gene's gross earnings = $440 + 18% x (5,500 - $2,800)
	Gene's gross earnings = $440 + 18% x $2,700
	Gene's gross earnings = $440 + $486
	Gene's gross earnings = $926



Notes:	If there is sales return , then Gross Earnings will changes:

	Gene's gross earnings = Weekly salary + commission
	Gene's gross earnings = $440 + 18% x (total sales -Returned sales - target )
	Gene's gross earnings = $440 + 18% x (5,500 -1,250 - 2,800 )
	Gene's gross earnings = $440 + 18% x 1,450
	Gene's gross earnings = $440 + 261
	Gene's gross earnings = $701


So,	Gene's gross earnings have been if there were no returned sales will be $926

Please feel free to ask if anything about above solution in comment section of the question.

ekkarill92 answered 1 year ago

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