Question
Luxus, Inc.employs 45 sales personnel to market its line of luxury automobiles. The average car sells for $23,000, and a 6 percent commission is paid
Luxus, Inc.employs 45 sales personnel to market its line of luxury automobiles. The average car sells for $23,000, and a 6 percent commission is paid to the salesperson. Luxus Motors is considering a change to the commission arrangement where the company would pay each salesperson a salary of $2,000 per month plus a commission of 2 percent of the sales made by that salesperson. The amount of total monthly car sales at which Luxus Motors would be indifferent as to which plan to select is: A) $1,500,000. B) $1,250,000. C) $2,250,000. D) $3,000,000.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started