Required information (The following information applies to the questions displayed below.) The Jurassic Classics has four employees on its sales team and uses a compensation that provides each person with a base salary of $49,600 per year and the opportunity to earn commission on sales. The current commission is 5% of gross sales, and sales for the most recent period were $3,100,000. Management is considering making a change to the compensation system and wants to evaluate two possible alternatives: going to a strictly commission-based compensation system and going to purely salary-based compensation. The strictly commission-based method would eliminate the salary but raise the commission to 11% of sales. If the purely salary-based approach is adopted, the salary for each person would rise to $86,800 and the commission would be eliminated. Required: 1. Compute the total compensation of the sales team for all three options at $2,480,000, $3,100,000, and $3,480,000 of total sales. 2. What sales level would make management indifferent between the current compensation structure and the strictly commission- based structure? What is the point of indifference between the current structure and the pure salary-based structure? Required: 1. Compute the total compensation of the sales team for all three options at $2,480,000, $3,100,000, and $3,480,000 of total sales. 2. What sales level would make management indifferent between the current compensation structure and the strictly commission- based structure? What is the point of indifference between the current structure and the pure salary-based structure? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the total compensation of the sales team for all three options at $2,480,000, $3,100,000, and $3,480,000 of total sales. Commission Only Salary Only Sales Current Method 2,480,000 3,100,000 3,480,000 $ Required 1 Required 2 > Required: 1. Compute the total compensation of the sales team for all three options at $2,480,000, $3,100,000, and $3,480,000 of total sales. 2. What sales level would make management indifferent between the current compensation structure and the strictly commission- based structure? What is the point of indifference between the current structure and the pure salary-based structure? Complete this question by entering your answers in the tabs below. Required 1 Required 2 What sales level would make management indifferent between the current compensation structure and the strictly commission-based structure? What is the point of indifference between the current structure and the pure salary-based structure? (Round your answer to the nearest whole dollar.) Point of Indifference Current versus commission only Current versus salary only
