Margaret, the owner of a used car dealership, is working on compensation plans for her employees. She is trying to evaluate how a

commission$-$based versus salary$-$based workforce would affect her bottom line. In considering her options, she finds basic financial

information of two companies with similar year$-$end performance but different compensation plans$-$perfect examples to help her

with her evaluation!

Company $x$ uses a commission$-$based approach, where its sales staff operates exclusively on commission. Company Y$,$ on the other

hand, pays its sales staff a flat salary with no commission. Here are the basics for each company.