Question

Chris can be paid in one of two ways. Plan A is a salary of $460 per month, plus a commission of 8% of sales. Plan B is a salary of $688 per month, plus a commission of 5% of sales. For what amount of sales is Chris better off selecting plan A?

Answer 1

Turn into equations. Call sales are S.

Equation for:
Plan A salary = ?
Plab B salary = ?

Answer 2

i dont understand the question

Answer 3

i mean i cant find out how to get the equations out

Answer 4

Simply put yourselves in the sales person's shoes. Your boss says I can pay you based on two different equations. Plan A and Plan B. Both depend on sales. The question is asking at what level of sales is Plan A better.

Answer 5

Pay according to plan A = $460 + 8% of sales.
= $460 + 0.08*S
Pay according to Plan B = $688 + 5% of Sales
= $688 + 0.05*S

At what level of S will they be equal?

Answer 6

sheg - you are of no help by throwing a number. goal is to educate so the person becomes good at solving problems. not taking answers.

Answer 7

ok bro will remember this by the way answer is $ 7600

Answer 8

do do i subtract 460 and 688 over and divide but the percentage but wouldnt that give me a - number?

Answer 9

228 = 0.03*s
s = 228/0.03 = $ 7600

Answer 10

now im more confused...

Answer 11

why did you find the difference of the 2 plans?

Answer 12

The question is, at what level of S will plan A produce better pay.

So, $460 + 0.08S must be greater than $688 + 0.05S.

0.08S - 0.05S > $688 - $460
=> 0.03S > 228
=> S > $288 * 100/3
=> S > $7600

So, Plan A produces better when sales exceed $7,600.

Given the two choices, sales people who are less confident of generating more than $7,600 sales will take plan B (pays more up front). Others will choose plan A.