Question

1-7 calculating graduated commissions
you might be offered varying rates of commission based on several different levels of sales. if you receive a different rate of commission when you reach a specified quota, you are paid what is known as a graduated commission.
total graduated commission = sum of commissions for all sales levels
example
find the total graduated commission.
david michaels is a used - car salesman. as an incentive to bolster sales, michaels manager offers the following graduated commission:

commission percentage	level of sales
5.0%	next $15,000
8.0%	over $25,000

michaels sales for the month of june were $32,000. find his total commission for the month.

1. ($10,000×2.5%)=($10,000.00×0.025) = $250.00 commission level 1
2. ($15,000×5%)=($15,000.00×0.05) = $750.00 commission level 2
3. ($32,000 - $25,000)×8%=$7,000.00×0.08 = $560.00 commission level 3
4. $250.00 + $750.00 + $560.00 = $1,560.00 total commission

practice
find the total graduated commission.

1. commission: 6 percent on first $10,000; 8 percent over $10,000. find the total graduated commission on $12,500.
2. commission: 3 percent on first $2,500; 5 percent on second $2,500; 7.5 percent over $5,000. find the total graduated commission on $5,800.
3. commission: $5 for the first 20 demonstrations; $7 for all demonstrations over 20. what is the total graduated commission for 28 demonstrations?
4. sandra brown works as a beautician. she earns a $1 commission for the first 50 haircuts and a $1.50 commission for all haircuts over 50. in addition, she receives a base salary of $250 per week. if she performs 72 haircuts, what is her total pay for the week?
5. standardized test practice mitchell gomez is an auto mechanic. he earns a base salary of $2,000 per month. in addition, he receives the following graduated commissions: 2 percent for the first $5,000 in repairs and 3 percent over $5,000. if he exceeds $10,000 in repairs, he is given a $500 bonus. what is gomezs total pay for the month if he does $10,125 in repairs?

a. $2,000 b. $2,750 c. $2,753.75 d. $2,253.75

Explanation:

Step1: Calculate first - level commission

For the first $10,000$ at 6% commission rate, the commission is $10000\times0.06=\$600$.

Step2: Calculate second - level commission

The amount over $10,000$ is $12500 - 10000=\$2500$. The commission on this amount at 8% is $2500\times0.08=\$200$.

Step3: Calculate total commission

The total graduated commission is $600 + 200=\$800$.

Step1: Calculate first - level commission

For the first $2500$ at 3% commission rate, the commission is $2500\times0.03=\$75$.

Step2: Calculate second - level commission

For the second $2500$ at 5% commission rate, the commission is $2500\times0.05=\$125$.

Step3: Calculate third - level commission

The amount over $5000$ is $5800 - 5000=\$800$. The commission on this amount at 7.5% is $800\times0.075=\$60$.

Step4: Calculate total commission

The total graduated commission is $75+125 + 60=\$260$.

Step1: Calculate first - level commission

For the first 20 demonstrations at $5$ each, the commission is $20\times5=\$100$.

Step2: Calculate second - level commission

The number of demonstrations over 20 is $28 - 20 = 8$. For these 8 demonstrations at $7$ each, the commission is $8\times7=\$56$.

Step3: Calculate total commission

The total graduated commission is $100+56=\$156$.

Step1: Calculate first - level commission

For the first 50 haircuts at $1$ each, the commission is $50\times1=\$50$.

Step2: Calculate second - level commission

The number of haircuts over 50 is $72 - 50=22$. For these 22 haircuts at $1.50$ each, the commission is $22\times1.5=\$33$.

Step3: Calculate total pay

The base salary is $250$. The total pay is $250+50 + 33=\$333$.

Answer:

$800$