A sales representative is paid the greater of $950 or 8% of sales. At what volume of sales will he start to earn more from the commission-based compensation?
A) $9,500
B) $1,026
C) $1,875
D) $1,187.50
E) $11,875

Question

Quizplus · Accepted Answer

To earn more than $950 through commission, the sales representative needs to make sales where 8% of the sales volume exceeds $950. Setting up the equation 0.08 * sales = $950, solving for sales gives sales = $950 / 0.08 = $11,875. Therefore, at sales volume of $11,875, the representative starts to earn more from commission-based compensation.

A Sales Representative Is Paid the Greater of $950 or 8