Under a 100 percent commission plan, a salesperson has two sales in a month: $89,500 at 6% and $125,000 at 5.5%. Monthly desk rent is $900 and other expenses are $1,265. How much income does the salesperson keep for the month?

Under a 100 percent commission plan, a salesperson has two sales in a month: $89,500 at 6% and $125,000 at 5.5%. Monthly desk rent is $900 and other expenses are $1,265. How much income does the salesperson keep for the month?

• A. $10,080
• B. $11,000
• C. $12,000
• D. $9,000

Answer: (A)

In a 100 percent commission plan, the salesperson keeps all commissions earned but must pay their own business expenses, so net income equals total commissions minus expenses. Compute the commissions: 89,500 at 6% is 5,370. The second sale is 125,000 at 5.5% which is 6,875. Add them to get total gross commissions: 5,370 + 6,875 = 12,245. Total expenses are desk rent plus other expenses: 900 + 1,265 = 2,165. Net income kept for the month is 12,245 − 2,165 = 10,080. So the amount kept is $10,080.

In a 100 percent commission plan, the salesperson keeps all commissions earned but must pay their own business expenses, so net income equals total commissions minus expenses.

Compute the commissions: 89,500 at 6% is 5,370. The second sale is 125,000 at 5.5% which is 6,875. Add them to get total gross commissions: 5,370 + 6,875 = 12,245.

Total expenses are desk rent plus other expenses: 900 + 1,265 = 2,165.

Net income kept for the month is 12,245 − 2,165 = 10,080.

So the amount kept is $10,080.