Question

Costa earned a gross commission of 2101.05 during july. What were his sales if his rate of commission is 10.5% of net sales and sales returns and allowances for the month were 8% of his gross sales?

Answer 1

$21,750

Explanation:

If returns and allowances were 8% of Costa's sales, then his net sales were 92% of his gross sales. His commission is figured on net sales, so we have ...

commission = rate × net sales = rate × (92% × gross sales)

$2101.05 = 0.105 × 0.92 × gross sales

gross sales = $2101.05/(0.105×0.92) = $21,750

Costa's gross sales for July were $21,750.