Alix Is a Salesperson Who Receives an Annual Salary of $18,000

question 21

Multiple Choice

Alix is a salesperson who receives an annual salary of $18,000 paid semimonthly plus commissions of 5% of the retail price of each unit he sells which is paid on the final pay date of the month. During his first month of employment, he sold four units for a total of $1,000 and requested a 5% draw against his $15,000 monthly minimum sales, in accordance with his employment agreement. How much should Alix receive in his gross pay for the end of his first month?

• A) $800.00
• B) $1,250.00
• C) $1,550.00
• D) $1,750.00

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Definitions:

Average Variable Cost

The total variable cost per unit of output, obtained by dividing total variable costs by the quantity of output.

Output

The total amount of goods or services produced by a company or country.

TVC

Total Variable Cost, the sum of all variable costs (costs that vary with production volume) associated with producing a specific quantity of a good or service.