You just got a job as a salesman. You have a choice of different salary plans. Plan A Earnings: 52040 per month plus 10% of sales Plan B Earnings: 51785 per month plus 12% of sales Plan C Earnings: $1530 per month plus 15% of sales Your total compensation will increase for larger sales volume and decrease when sales go down There is a trade off in the three plans. If you want a higher salary, you need to accept a lower commission. To figure out which plan is best for you, you need to estimate the amount of sales you expect to make during the year. Estimate (Case 1) Sales are about the same every month. Use $4000 as the average per month. You need to find the total for the entire year. Estimate (Case #2) Sales are about the same for the first ten months of the year: $4,000 per month. For November and December they double the previous month's total. . You need to find the sales total, in dollars, for the entire year, using different assumptions for revenue. Calculate your total yearly sales revenue. Case 1 Sales in $ Case 1 Case 2 Sales in $ Case 2 Month Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total Calculate how much commission (bonus) you would earn yearly for each case. Calculate the annual salary for each salary plan Combine the two payments to find which salary plan pays the most in Case 1. Case 1 Annual Commission Annual Salary Total Compensation Plan A Plan B Plan C Commission Rate 10% 12% 15% Monthly Salary $2,040 $1,785 $1,530 Combine the two payments to find which salary plan pays the most in Case 2 Case 2 Annual Commission Annual Salary Total Compensation Plan A Plan B Plan C Commission Rate 10% 12% 15% Monthly Salary $2,040 $1,785 $1,530 If Total Sales equaled $100,000, which plan pays the most? $100,000 Annual Salary Total Compensation Plan A Plan B Plan C Commission Rate 10% 12% 15% Commissions Paid on $100K Monthly Salary $2,040 $1,785 $1,530

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