Question

chris can be paid in one of two ways. plan a is a salary of $370 per month, plus a commission of 8% of sales. plan b is a salary of $730 per month, plus a commission of 3% sales. For what amount of sales is chris better off selecting plan a?

Answer 1

For a sale value greater than $7200 the plan a is profitable.

Explanation:

Let us assume for a sale of $x, Chris will choose plan a.

Now, in plan a, a commission of 8% of sales and $370 per month, is the salary.

So, for a sale of $x the salary is $(370 + 0.08x) per month.

And, in plan b, a commission of 3% of sales and $730 per month, is the salary.

So, for a sale of $x the salary is $(730 + 0.03x) per month.

Now, for selecting plan a, the condition is

(370 + 0.08x) > (730 + 0.03x)

⇒ 0.05x > 360

⇒ x > 7200

Therefore, for a sale value greater than $7200 the plan a is profitable. (Answer)