The Jurassic Classics has four employees on its sales team and uses a compensation that provides each person with a

base salary of $$51,200$ 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 $$3,200,000.$ 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 $$89,600$ and the commission would be eliminated.

Required:

Compute the total compensation of the sales team for all three options at $$2,560,000,$$$3,200,000,$ and $$3,560,000$ of total sales.

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 $2$

Compute the total compensation of the sales team for all three options at $$2,560,000,$$$3,200,000,$ and $$3,560,000$ of total

sales.