Search
Ask a question
0 0

How to solve this? algebra

When hired at a new job selling jewelry, you are given two pay options:

Option A: Base salary of $13,000 a year, with a commission of 11% of your sales

Option B: Base salary of $19,000 a year, with a commission of 5% of your sales

In order for option A to produce a larger income, you would need sell at least $ of jewelry each year.
Tutors, please sign in to answer this question.

1 Answer

In order to find out where option A, lower base salary than option B but a higher sales commission, has a larger income, we first find out where they are equal.
 
Income of Option A = $13,000 + 11% of sales where 
 
Income of Option B = $19,000 + 5% of sales
 
Setting them equal gives us
 
$13,000 + 11% of sales  =  $19,000 + 5% of sales and solving for sales gives us
 
11% of sales  - 5% of sales = $19,000 - $13,000 = 6% of sales = $6,000 
 
solving for Sales = $6,000/.06
 
Anything above this amount of sales will mean a higher value for Option A.
 
Hint: Total income for both options at break-even point is $24,000