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

Option A: Base salary of $16,000 a year, with a commission of 8% of your sales

Option B: Base salary of $23,000 a year, with a commission of 4% of your sales

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 $16,000 a year, with a commission of 8% of your sales

Option B: Base salary of $23,000 a year, with a commission of 4% of your sales

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

anonymous · Answer

Option A: Comp = $16,000 + Sales(.08)
Option B: Comp = $23,000 + Sales(.04)
The question is basically, at what sales volume are these two equivalent?
$16,000 + Sales(.08) = $23,000 + Sales(.04)
(.04)Sales = $7,000
Sales=$7,000/.04
Sales=$175,000

If you make more than $175,000 in sales you are better off going with Option A

anonymous · Answer

no idea if this is right but maybe will get u moving in the right direction
$$16,000+.08x = 23,000 + .04x$$ where x is the amount needed to be sold and then solve for x giving u 175,000