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Question 1038977: A salesperson works at a computer store. He has a choice of two
payment plans. Plan A is to have a commission of 10% of his monthly
sales; plan B is a monthly salary of $1750 plus a commission of 1.5% of
his month sales. Which is the better payment plan for the
salesperson
Answer by Aldorozos(172)   (Show Source):
You can put this solution on YOUR website! First we have to find out what his break-even point is
10% X = 1750 + 1.5% X
Here we have to calculate X
We can rewrite the equation as follows:
.10x = 1750 + .015X
.08X = 1750
X = 1750/.08 = around $20588
If he sells $20588 every month he can choose any of the plan and still make the same amount of commission. However if he sells more than $20588, he is better to get the 10% commission instead of only 1.5%.
Therefore as long as the sales are less than $20588, he is better off with $1750 plus 1.5% but if the sales are greater than $20588, he should go with 10%
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