SOLUTION: Stan can be paid in one of two ways
Plan A - $900 per month plus a 10% commission on all sales
or
Plan B - $1200 per month plus a 15% commission on all sales over $8000
If w
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Question 323550: Stan can be paid in one of two ways
Plan A - $900 per month plus a 10% commission on all sales
or
Plan B - $1200 per month plus a 15% commission on all sales over $8000
If we assume that Stan always sells more than $8000, when is plan B better?
The book says for values > $18,000.....but I don't get it....
Answer by josmiceli(19441) (Show Source): You can put this solution on YOUR website!
There is a linear relation in both plans between
Earnings/month = (flat wages)/month + (commission earned/month)
given:
plan A:
plan B:
The 2nd term doesn't come into play until , otherwise
Stan would be penalized if sales were less than $8000
The question is: when is the same under both plans?
When sales are over $1800, plan B is better
I can plot these plans with = vertical axis in thousands of dollars
and = horizontal in thousands of dollars
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