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Ronald Dowd receives an annual base salary of $87,500 as a salesman in the Southern region, which has an annual sales quota of $450,000. For all sales over this quota, Dowd receives a commission of 4½ percent. For the current year, sales in the Southern region total $698,000. The amount of salary and commissions due to Dowd is $

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Answer:

$99,110

Explanation:

The commission due to Dowd is a function of the surplus made in the region over the annual quota.

Given that the annual quota for the Southern region is $450,000 and the sales in the same region for the year is $698,000.

The surplus sales over the annual quota

= $698,000 - $450,000

= $258,000

Since Dowd receives a commission of 4½ percent for all sales over the given quota,

Dowd's commission = 4½ × $258,000

= $11,610

The amount of salary and commissions due to Dowd

= $87,500 + $11,610

=$99,110

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