Question

Daniel's annual gross income is determined by his base salary and commission on sales. Given that his annual sales average is $187,400, his commission rate is 30%, and his base salary is $40,000, the formula for annual gross income is:

Calculate to find Daniel's annual gross income.

a) $74,220
b) $93,220
c) $101,220
d) $120,220

Answer 1

To calculate Daniel's annual gross income, multiply his annual sales by the commission rate, and add it to his base salary. The correct answer is $93,220.

Step-by-step explanation:

To calculate Daniel's annual gross income, we need to find the commission he earned and add it to his base salary. The commission is calculated by multiplying his average sales by the commission rate. So, the commission earned is $187,400 x 0.30 = $56,220. Adding this to Daniel's base salary of $40,000 gives us the annual gross income: $56,220 + $40,000 = $96,220. Therefore, the correct answer is option b) $93,220.