Hi All,
We're told that Martha receives an annual salary of $20,000 plus a commission of 10 percent on sales in EXCESS of $80,000 while Sandra receives an annual salary of $30,000 plus a 5 percent commission on her total annual sales only IF they exceed $120,000. We're asked which sales figures would result in EQUAL earnings for both Marta and Sandra. This question can be solved Algebraically or by TESTing THE ANSWERS.
Let's TEST Answer B: $150,000
IF....Martha had $150,000 in sales, her commission would be 10% of $150,000 - $80,000 = $70,000.... a $7,000 commission. However, that would raise her total to just $27,000, which is clearly NOT enough to match Sandra's $30,000 base salary. This answer is TOO SMALL, so we can eliminate Answers A and B, and we know the total sales would have to be a lot bigger.
Answer D: $360,000
IF....Martha had $360,000 in sales, her commission would be 10% of $360,000 - $80,000 = $280,000.... a $28,000 commission and a total pay of $48,000.
Sandra's commission would be 5% of $360,000 = $18,000 and a total pay of $48,000
These two totals match, so this must be the answer.
Final Answer: D
GMAT assassins aren't born, they're made,
Rich
