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Mohammad Is Paid a Weekly Commission of 2% on Net

question 107

Essay

Mohammad is paid a weekly commission of 2% on net sales of $6000.00, 4% on the next $3 000.00 and 6.25% on all further sales. His gross sales for a week were 11 160.00 and sales returns and allowances were $120.00.
a) Calculate his gross earnings for the week.
b) Calculate the average hourly rate of pay for the week if he worked 40 hours.


Definitions:

Capital Gains

Profit earned from the sale of assets like stocks or real estate, where the sale price exceeds the purchase price.

Ordinary Income

Income earned from standard operations of a business or through wages, as opposed to capital gains or investment income.

Profitability of Operations

An assessment of how efficiently a company generates profit from its core business activities, excluding peripheral activities.

EBIT

An indicator of company profit, Earnings Before Interest and Taxes, which omits the costs related to interest and taxes.

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