Question

Ogden Corp. hired Thorp as a sales representative for nine months at a salary of $3,000 per month plus 4% of sales. Which of the following statements is correct?

1) Thorp will receive a fixed salary of $3,000 per month.
2) Thorp will receive a commission of 4% on all sales.
3) Thorp will receive a commission of 4% on sales plus a fixed salary of $3,000 per month.
4) Thorp will receive a commission of 4% on sales or a fixed salary of $3,000 per month, whichever is higher.

Answer 1

The correct statement is option 3) Thorp will receive a commission of 4% on sales plus a fixed salary of $3,000 per month.

Step-by-step explanation:

The correct statement is option 3) Thorp will receive a commission of 4% on sales plus a fixed salary of $3,000 per month.

This means that Thorp will receive a fixed salary of $3,000 per month no matter the sales performance, and in addition to that, Thorp will also receive a commission of 4% on the sales made.

For example, if Thorp makes $50,000 in sales, the commission would be 4% of $50,000, which is $2,000. So Thorp would receive a total of $3,000 (fixed salary) + $2,000 (commission) = $5,000 for that month.