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earnings question

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earnings question

by kevind147 » Fri Mar 27, 2009 8:18 am
114. Salesperson A's compensation for any week is $360 plus 6 percent of the portion of A's total sales above $1,000 for that week. Salesperson B's compensation for any week is 8 percent of B's total sales for that week. For what amount of total weekly sales would both salespeople earn the same compensation?

A. $21,000
B. $18,000
C. $15,000
D. $4,500
E. $4,000

I know that you set each salesperson's equation equal to each other. What I don't know is why salesperson A's equation is 360 + .06(x - 1000) instead of 360 + .06(x + 1000). Why do you subtract 1000? I added it and got A. The answer is C.
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by rs2010 » Fri Mar 27, 2009 8:29 am
Because A will receive compensation when sales will cross 1000

If sales are 1200 then A will get compensation (1200-1000) * 0.06 what you are calculating is 1200+1000.

portion of A's total sales above $1,000
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backsolving?

by leo700 » Mon Sep 14, 2009 4:44 pm
what about back solving this problem?

is it possible?
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by sanjana » Thu Sep 17, 2009 1:40 am
Yes it is definitely possible to solve this by starting with the answers.

Lets start with (C) - 15000

If A makes a total sales of 15000, A's compensation is
360 + 6% on 14000 (amount above 1000)

=360+0.06*14000
=1200

If B makes a total sales of 15000, B'S compensation is 0.08*15000 = 1200

The question asks you exactly this - for what amount of total sales will the total compensation be the same.

generally when u backsolve,you may not get a hit at this 1st choice u pick,its best to start with C or D and then based on the asnwer u get,you know where to go next.
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