This business/management problem is solved step by step below, with detailed explanations to help you understand the method and arrive at the correct answer.
ScanSolve AI Answer
Here's how to calculate the salesman's commission and total earnings: Basic Salary: Ksh 15,000 per month Total Sales for the month: Ksh 115,000 Commission Structure: Up to Ksh 50,000 sales: 0% commission For the 1st Ksh 25,000 above Ksh 50,000 (i.e., sales from Ksh 50,001 to Ksh 75,000): 2.5% commission For the next Ksh 25,000 (i.e., sales from Ksh 75,001 to Ksh 100,000): 5% commission For sales above Ksh 100,000: 5% commission a) How much commission did he earn that month? Step 1: Calculate commission for sales up to Ksh 50,000. Sales amount: Ksh 50,000 Commission rate: 0% Commission_1 = 50,000 × 0\% = Ksh 0 Step 2: Calculate commission for the 1st Ksh 25,000 above Ksh 50,000. This covers sales from Ksh 50,001 to Ksh 75,000. Sales amount in this tier: Ksh 75,000 - 50,000 = 25,000 Commission rate: 2.5\% Commission_2 = 25,000 × (2.5)/(100) = 25,000 × 0.025 = Ksh 625 Step 3: Calculate commission for the next Ksh 25,000. This covers sales from Ksh 75,001 to Ksh 100,000. Sales amount in this tier: Ksh 100,000 - 75,000 = 25,000 Commission rate: 5\% Commission_3 = 25,000 × (5)/(100) = 25,000 × 0.05 = Ksh 1,250 Step 4: Calculate commission for sales above Ksh 100,000. Total sales: Ksh 115,000 Sales amount in this tier: Ksh 115,000 - 100,000 = 15,000 Commission rate: 5\% Commission_4 = 15,000 × (5)/(100) = 15,000 × 0.05 = Ksh 750 Step 5: Calculate the total commission. Total Commission = Commission_1 + Commission_2 + Commission_3 + Commission_4 Total Commission = 0 + 625 + 1,250 + 750 = Ksh 2,625 The commission he earned that month is Ksh 2,625. b) What was his total earning that month? Step 1: Add the basic salary and the total commission. Total Earning = Basic Salary + Total Commission Total Earning = 15,000 + 2,625 = Ksh 17,625 His total earning that month was Ksh 17,625. Last free one today — make it count tomorrow, or type /upgrade for unlimited.