Abu Sells Mutual Funds for CIBC

question 134

Multiple Choice

Abu sells mutual funds for CIBC. On mutual funds sales, CIBC charges a "front-end load" or gross commission rate of 5%. Abu is paid on a graduated commission structure. He receives 30% commission on the first $50 000 worth of mutual funds he sells in a month, 40% commission for the next $50 000 worth of mutual funds, and 75% commission on all additional sales in the same month. What is Abu's commission for a month in which he sells $150 000 worth of mutual funds?

• A) $3625
• B) $2250
• C) $2700
• D) $4500
• E) $5625

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Definitions:

General Journal Entries

Records of financial transactions where each entry is recorded in a double-entry accounting system, impacting at least two accounts.

Terms 2/10, N/30

Terms 2/10, N/30 are payment terms indicating that a buyer can take a 2% discount on the invoice price if the payment is made within 10 days; otherwise, the net amount is due within 30 days.

Merchandise Inventory

Goods that a company holds for sale to customers, considered an asset on the balance sheet.