Nancy Is a Realtor and Earns Income Based on a Graduated

question 315

Multiple Choice

Nancy is a realtor and earns income based on a graduated commission scale. Nancy is paid $3, 000 plus 2.5% on the first $140,000; 1.5% on the next $300,000 and .5% on the remaining value over $440,000. Determine Nancy's commission earned after selling a $625,000 house.

• A) $5,500
• B) $6,400
• C) $9,750
• D) $10,860
• E) $11,925

Understand the concepts and requirements that constitute a binding contract.

Identify the difference between an offer to form a contract and other pre-contractual statements.

Recognize the elements necessary for an effective offer.

Distinguish between offers and invitations to negotiate or bid.

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Definitions:

Pretax Income

The amount of income earned by a business before paying taxes, also known as earnings before tax (EBT).

Overstated

When figures or amounts are reported higher than they actually are, potentially misrepresenting the financial condition of a business.

Inventory Accounting Methods

Different approaches to valuing and managing inventory, including FIFO (First In, First Out), LIFO (Last In, First Out), and weighted average cost.

FIFO Reserve

The difference between the cost of inventory calculated using the First In, First Out (FIFO) method and another inventory costing method.