Alan R. answered 07/17/20
Finance, Econometrics, Excel, & Public Speaking
We know that the base salary of $575/mo. is not based on commission and can simply be added to the equation. So the question is, how many $1,950 sales does the salesman have to make for his/her 9% commission to equal $2,700.
Let's write it like this: 2,700 = 575 + (1,950*0.09)X
where $2,700 is the goal monthly salary and it equals the individual base salary of $575 plus the 9% commission on sales over $1,950 multiplied by X which represents the number of sales he or she has to make to attain the goal. Now, just solve for X!
2,700 = 575 + 175.5X
*(subtract 575 from both sides)
2,125 = 175.5X
*(divide both sides by 175.5)
X = 12.1
Since the value is not an integer and likely he or she cannot sell 0.1 items, the salesman should seek to sell 13 items of greater value than $1,950 per month based on the 9% commission if they wish to have a monthly salary of $2,700.
Thanks!