Question

Proton Company has 6 sales representatives and pays them a salary of 20,000 each per month. It also pays 10 percent commission on the sale price of each refrigerator. Each refrigerator is sold at a price of 10,000. Compute the total selling expenses (associated with the sales representatives) incurred by Proton for the month of August. Assume each of the reresentatives sold 5 refrigerators in the month of August.

Answer 1

The total selling expenses incurred by Proton for the month of August is $150,000.

Step-by-step explanation:

The total selling expenses incurred by Proton for the month of August can be calculated by adding the salaries of the sales representatives and the commissions paid. Since there are 6 sales representatives and each is paid a salary of $20,000 per month, the total salary expense for the month is 6 * $20,000 = $120,000.

Each representative sold 5 refrigerators in August, and for each refrigerator sold, Proton pays a 10% commission on the sale price. The sale price of each refrigerator is $10,000, so the commission per refrigerator is 10% * $10,000 = $1,000.

Therefore, the total commission expense for the month is 6 sales representatives * 5 refrigerators * $1,000 commission per refrigerator = $30,000.

The total selling expenses incurred by Proton for the month of August is $120,000 (salaries) + $30,000 (commissions) = $150,000.