In order for option A to produce a larger income, you would need sell at least $ of jewelry each year

Question

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

Option A: Base salary of $17,000 a year, with a commission of 9% of your sales

Option B: Base salary of $22,000 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

Answer 1

17 +.09S = 22 + .05S (units of $1000)

.09S -.05S = .04S =22-17 = 5

.04S = 5

S = 5/.04 = 125 = $125,000 in jewelry sold for A and B to be equal

for A to pay more, you must sell more than $125,000 worth of jewelry for the year