A sales staff is composed of a sales manager and two . . . .

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VJesus12: Legendary Member; Posts: 2276; Joined: Sat Oct 14, 2017 6:10 amFollowed by: 3 members

by VJesus12 » Sat Jan 13, 2018 9:14 am

A sales staff is composed of a sales manager and two sales people, all of whom earn commission as a percentage of sales. Each sales person earns 5% commission on sales. In a given week, the sales staff earned a total of $1,750 in commissions on $5,000 worth of sales. What commission rate did the sales manager earn during that week?

(A) 25%
(B) 30%
(C) 35%
(D) 40%
(E) 45%

The OA is the option A.

What is the equation I should set here to solve this PS question? Experts, can you give me some help, please? Thanks.

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Source: Beat The GMAT — Problem Solving | Sat Jan 13, 2018 9:14 am

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by [email protected] » Sat Jan 13, 2018 12:36 pm

Hi VJesus12,

We're told that a sales staff is composed of a Sales Manager and 2 Sales People, all of whom earn commission as a percentage of sales and each Sales Person earns 5% commission on sales. In a given week, the sales staff earned a total of $1,750 in commissions on $5,000 worth of sales. We're asked for the commission rate of the Sales Manager earn during that week. Although the prompt doesn't clearly state it, we're meant to assume that the each person earns a commission based on the TOTAL sales for the GROUP.

With $5,000 in TOTAL sales, EACH Sales Person earns (.05)($5,000) = $250 in commission

This means that the remaining $1750 - (2)($250) = $1250 in commission went to the Sales Manager.

The Sales Manager's commission rate = $1250/$5000 = 2500/10,000 = 1/4 = 25%

Final Answer: A

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

Contact Rich at [email protected]

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Jeff@TargetTestPrep: GMAT Instructor; Posts: 1462; Joined: Thu Apr 09, 2015 9:34 amFollowed by: 22 members; Location: New York, NY; Thanked: 39 times

by Jeff@TargetTestPrep » Mon Jan 29, 2018 11:08 am

VJesus12 wrote:A sales staff is composed of a sales manager and two sales people, all of whom earn commission as a percentage of sales. Each sales person earns 5% commission on sales. In a given week, the sales staff earned a total of $1,750 in commissions on $5,000 worth of sales. What commission rate did the sales manager earn during that week?

(A) 25%
(B) 30%
(C) 35%
(D) 40%
(E) 45%

Each salesperson earned 0.05 x 5,000 = 250, so the two earned 500 dollars, and the sales manager earned 1,750 - 500 = 1,250.

So the commission rate was 1,250/5,000 = 0.25 = 25%.

Answer: A

Jeffrey Miller
Head of GMAT Instruction
[email protected]

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