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JJ Motors Inc. employs 45 sales personnel to market their line of luxury automobiles. The average car sells for $23,000, and a 6 percent commission is paid to the salesperson. JJ Motors is considering a change to the commission arrangement where the company would pay each salesperson a salary of $2,000 per month plus a commission of 2 percent of the sales made by that salesperson. The amount of total monthly car sales at which JJ Motors would be indifferent as to which plan to select is

User Paperjam
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1 Answer

4 votes

Answer:

$2,250,000

Step-by-step explanation:

JJ Motors Inc

Salesperson salary per months $2,000 ×45 Sales personnel

=$90,000

6 percent commission -Commission of 2 percent made from sales

=4%

Total revenue =$90,000/0.04

=$2,250,000

User Pachun
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