Question

When hired at a new job selling electronics, you are

given two pay options:
• Option A: Base salary of $20,000 a year with a
commission of 12% of your sales
• Option B: Base salary of $26,000 a year with a
commission of 3% of your sales
How much electronics would you need to sell for
option A to produce a larger income?

Answer 1

Answer: You would need to sell $66,667 worth of electronics.

Explanation:

We can use equations:

Option A - 20,000 + 0.12x

Option B - 26,000 + 0.03x

If we set them equal to each other, we can find the x value at which the electronics sold give us equal income

20000+0.12x = 26000+0.03x

0.9x = 6,000

x = 66,666.67