David is paid on a graduated commission scale at Nooter Company. He receives 2% commission on the first $20,000, 6% on sales from $20,000 to $70,000, 8.5% commission on sales from $70,000 to $100,000, and 10% commission on sales over $100,000. David had sales of $82,000. His commission is:
A)$8,200
B)$6,200
C)$4,240
D)$4,420
E)None of these

Question

Quizplus · Accepted Answer

To calculate David's commission, we need to break up his sales into the different commission rates:

- For the first $20,000, David earns 2% commission, which is $400.
- For the next $50,000 ($70,000 - $20,000), David earns 6% commission, which is $3,000.
- For the next $12,000 ($82,000 - $70,000), David earns 8.5% commission, which is $1,020.

So far, David's commission is $4,420 ($400 + $3,000 + $1,020).

- For any sales over $100,000, David earns 10% commission. However, he did not exceed $100,000 in sales, so we do not need to consider this additional commission rate.

Therefore, the correct answer is D)$4,420.

David Is Paid on a Graduated Commission Scale at Nooter