Salesperson

[email protected] wrote:Hi Iheiannie07,

We're told the pay rates for two salespeople:
1) Salesperson A = $360 + 6% of sales above $1,000
2) Salesperson B = 8% of sales

We're asked for the total sales that would lead to the SAME pay for each salesperson. This question can be solved algebraically or by TESTing THE ANSWERS. Here's how you can answer the question with the second method:

Let's TEST Answer B: $18,000
Person A = $360 + 6% of $17,000 = $360 + $1020 = $1380
Person B = 8% of $18,000 = $1440
These two values are close but not the same. Since Person B receives a higher percentage of every dollar in sales, a larger sales total would create a larger difference between what the two salespeople are paid. Thus, we need an answer that is SMALLER that $18,000 (but not that much smaller, relatively speaking).

Let's TEST Answer C: $15,000
Person A = $360 + 6% of $14,000 = $360 + $840 = $1200
Person B = 8% of $15,000 = $1200
These two values are EQUAL, so this MUST be the answer.

Final Answer: C

GMAT assassins aren't born, they're made,
Rich

lheiannie07 wrote:

Matt@VeritasPrep wrote:We could also try to speed up the problem by thinking of the differences in the incomes.

A has a $360 head start. After each salesperson sells $1000 of product, B has $80 and A has the same as (s)he started with, $360, since A gets no commission on the first $1000.

From here, B needs to make up $360 - $80, or $280, to be even with A.

B gets 2% more commission, so if each salesperson sells $x worth of product, 2% of $x must = $280, the difference to be made up.

.02x = 280 gives us x = $14,000, so after *another* $14,000 in sales the reps will be even.

We started with $1000, of course, leaving us a sales total of $1000 + $14,000, or $15,000.

Thanks for helping!