Ron Company has the following commission schedule: Commission rate 2% 3.5% 4% Calculate the gross earning. Employee Sales Up to $80,000 Excess of $80,000 to $100,000 More than $100,000 Bill Moore Total sales Gross earning $ 141,000

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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**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**.
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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