Note: In this chapter and in all succeeding work throughout the course, unless i
ID: 3194807 • Letter: N
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Note: In this chapter and in all succeeding work throughout the course, unless instructed otherwise, calculate hourly rates and overtime rates as follows: 1. Carry the hourly rate and the overtime rate to 3 decimal places and then round off to 2 decimal places (round the hourly rate to 2 decimal places before multiplying by one and one-half to determine the over-time rate). 2. If the third decimal place is 5 or more, round to the next higher cent. 3. If the third decimal place is less than 5, simply drop the third decimal place. Examples: Monthly rate $1,827 Weekly rate ($1,827 × 12)/52 = $421.615 rounded to $421.62 Hourly rate $421.62/40 = $10.540 rounded to $10.54 O.T. rate $10.54 × 1.5 = $15.81 Also, use the minimum hourly wage of $7.25 in solving these problems and all that follow. Example 2-21 Kate Kline receives an annual $35,000 base salary for working a certain territory. A sales quota of $800,000 has been set for that territory for the current year. Kline will receive a 6 percent commission on all sales in excess of $800,000. For the current year, the sales in the territory are $1,030,000. The bonus paid Kline would be: $13,800 (6% of $230,000) Kline's total earnings for the year would be: $48,800 ($35,000 + $13,800) Maria Cohen is employed as a salesperson in the men's department of Lee's Fashions. In addition to her weekly base salary of $400 (35-hour week), Cohen is paid a commission of 1% on her total net sales for the week (total gross sales less any customer returns). During the past week, to promote the sale of its fine cashmere sweaters, Lee's agreed to pay Cohen an additional PM (push money) of 3% of the total net sales of cashmere sweaters. Cohen's weekly sales tally is given below. Item Gross Sales Customer Returns Regular sweaters $600 $58 Cashmere sweaters 895 75 Ties 190 0 Dress shirts 445 39 Sports shirts 585 45 Compute Cohen's total weekly earnings, showing her (a) weekly base salary, (b) commission, (c) PM, and (d) total weekly earnings. If required, round your intermediate and final answers to the nearest cent. a. Weekly base salary $ Weekly gross sales $ Less customer returns Weekly net sales $ b. Commission: $ × 1% Weekly gross sales of cashmere sweaters $ Less customer returns Weekly net sales of cashmere sweaters $ c. Push money (PM): $ × 3% d. Total weekly earnings $ 23. 24. 25. 26. 27. 28. 29. 30. 31. Check My Work
Explanation / Answer
(a) weekly base salary = $400 ANSWER
(b) commission:
Item
Gross
Sales ($)
Customer Returns ($)
Net Sales
($)
Regular sweaters
600
58
542
Cashmere sweaters
895
75
820
Ties
190
0
190
Dress shirts
445
39
406
Sports shirts
585
45
540
Total
2715
217
2498
Commission = 2498 x 0.01 = $24.98 ANSWER
(c) PM
Net sales of Cashmere sweaters = 820
Push Money = 820 x 0.03 = $24.6 ANSWER
(d) total weekly earnings = $(400 + 24.98 + 24.60) = $449.58 ANSWER
Item
Gross
Sales ($)
Customer Returns ($)
Net Sales
($)
Regular sweaters
600
58
542
Cashmere sweaters
895
75
820
Ties
190
0
190
Dress shirts
445
39
406
Sports shirts
585
45
540
Total
2715
217
2498
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