Question

January 2010 - Question 1(b) (b) In a certain company, a salesman is paid a fixed salary of $3 140 per month plus an annual commission of 2% on the TOTAL value of cars sold for the year. If the salesman sold cars valued at $720 000 in 2009, calculate (i) his fixed salary for the year [1] (ii) the amount he received in commission for the year [1] (iii) his TOTAL income for the year [1]

Answer 1

(i) 37,680$ / year

(ii) 14,400$

(iii) 51,680$

Step-by-step explanation:

(i) Since he gets paid $3,140 / month, then for the year he makes as a fixed salary: $3,140 * 12 = $37,680

(ii) Since he has an annual commission of 2% and in 2009 he sold cars valued at $720,000, then the amount received in commission for the year: $720,000 * 2/100 = $14,400

(iii) Since his annual fixed salary is $37,680 and made a commission that year of $14,400, then his total income for that year is $37,680 + $14,400 = $51,680