You are offered the option of choosing a yearly salary of $45,000 or continue working on commission.
a. Using the equation from problem #1, how many appliances do you have to sell per year in order to match this salary? (Hint: $450 is the base pay per month, not year. Multiply the base pay by 12 to represent a full year.)
b. If you currently average 74 appliance sales per month, which option should you choose?
problem 1??
To answer both parts of the question, we need to calculate the annual earnings from working on commission. Let's go step by step.
a. To calculate the number of appliances you need to sell per year in order to match a yearly salary of $45,000, we first need to determine the base pay per year. The equation provided in problem #1 states that the base pay is $450 per month. To convert this to a yearly figure, we multiply it by 12, since there are 12 months in a year.
Base pay per year = $450 x 12 = $5,400
Now, to determine the number of appliances you need to sell, we can use the equation given in the problem:
Total Salary = Base pay per year + (Commission rate x Number of appliances sold)
$45,000 = $5,400 + (Commission rate x Number of appliances sold)
Rearranging the equation, we get:
(Commission rate x Number of appliances sold) = $45,000 - $5,400
(Commission rate x Number of appliances sold) = $39,600
Since we don't have the commission rate, we can't calculate the exact number of appliances needed to match the salary. What we can say is that the higher the commission rate, the lower the number of appliances you need to sell.
b. If you currently average 74 appliance sales per month, we can use this number to compare your earnings under the two options.
For the commission option, we need to calculate your annual earnings based on 74 appliances sold per month. Again, using the base pay per year of $5,400, we can calculate the commission earnings:
Commission earnings = (Commission rate x Number of appliances sold)
Commission earnings = Total Salary - Base pay per year
Now, since you already know the number of appliances sold per month and the annual base pay, you can choose the higher earning option by comparing the commission earnings with the offered salary of $45,000.