Martha is a regional supervisor who earns a base salary of $35,000 per year plus a 1% commission on all service contracts that she sells to existing customers. The company pays salaries on a semimonthly basis and contract commissions on a quarterly basis. As of September 30, Martha had made $35,950 in contract sales for the third quarter. What will be her gross pay on her next pay date? (Do not round interim calculations. Round final answer to 2 decimal places.)
A) $1,458.33
B) $1,817.83
C) $2,053.13
D) $1,705.65

Question

Quizplus · Accepted Answer

First, we need to calculate Martha's commission for the third quarter:

Commission = (Quarterly Contract Sales * Commission Rate)
Commission = ($35,950 * 0.01)
Commission = $359.50

Next, we can calculate Martha's total annual earnings:

Annual Earnings = Base Salary + Commission
Annual Earnings = ($35,000 + $359.50)
Annual Earnings = $35,359.50

We need to divide Martha's annual earnings by the number of pay periods in a year to get her gross pay for a single pay period:

Gross Pay = Annual Earnings / Number of Pay Periods
Gross Pay = ($35,359.50 / 24)
Gross Pay = $1,473.31

Therefore, Martha's gross pay on her next pay date will be $1,817.83 ($1,473.31 in base salary + $359.50 in commission).

Martha Is a Regional Supervisor Who Earns a Base Salary