FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Transcribed Image Text:**Ron Company Commission Schedule:**
Ron Company uses the following commission schedule:
- **2%** on sales **up to $80,000**
- **3.5%** on sales in **excess of $80,000 up to $100,000**
- **4%** on sales **more than $100,000**
**Task: Calculate the gross earning.**
Here is an example scenario:
| Employee | Total Sales | Gross Earning |
|-----------|-------------|---------------|
| Bill Moore | $141,000 | |
To calculate the gross earning for Bill Moore:
1. **Sales up to $80,000:**
- Commission = 2% of $80,000 = $1,600
2. **Sales from $80,000 to $100,000 (i.e., $20,000):**
- Commission = 3.5% of $20,000 = $700
3. **Sales in excess of $100,000 (i.e., $41,000):**
- Commission = 4% of $41,000 = $1,640
4. **Total Gross Earning:**
- $1,600 + $700 + $1,640 = $3,940
So, Bill Moore's gross earning would be **$3,940**.
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