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Fay Corp pays its outside salespersons fixed monthly salaries as well as commissions on net sales. Sales commissions are paid in the month following the

Fay Corp pays its outside salespersons fixed monthly salaries as well as commissions on net sales. Sales commissions are paid in the month following the month of sale, while the fixed salaries are expensed but considered advances against commissions. However, if salespersons' fixed salaries exceed their sales commissions earned for a month, such excess is not returned to the company. Pertinent data for the month of March for the three salespersons are as follows:

Salesperson Fixed Salary Net Sales Commission Rate

A

$10,000 $200,000 4%
B 14,000 400,000 6%
C 18,000 600,000 6%
Totals $42,000

$1,200,000

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