Holman Company pays each of its three salespeople a base salary of $1,000 per month plus a commission of 10 percent of their sales.The base salary is paid each month as incurred;the 10 percent commission is paid the month following the month of sale.The total sales for the past four months are as follows: Total salary and commission cash payments for September total

Question

Holman Company pays each of its three salespeople a base salary of $1,000 per month plus a commission of 10 percent of their sales.The base salary is paid each month as incurred;the 10 percent commission is paid the month following the month of sale.The total sales for the past four months are as follows:  Total salary and commission cash payments for September total

Quizplus · Accepted Answer

To calculate the commission earnings for each salesperson, we need to multiply their sales by 10% and then add their base salary of $1,000.

Salesperson 1: $10,000 x 0.1 + $1,000 = $2,000 
Salesperson 2: $15,000 x 0.1 + $1,000 = $2,500 
Salesperson 3: $5,000 x 0.1 + $1,000 = $1,500

Total commission earnings for the three salespeople in August: $2,000 + $2,500 + $1,500 = $6,000

Since the commission is paid the month following the month of sale, the total commission cash payments for September will be $6,000.

To find the total salary and commission cash payments for September, we need to add the base salaries for each salesperson.

Total salary and commission cash payments for September: $6,000 + ($1,000 x 3) = $9,000

Therefore, the best choice is C.

Holman Company Pays Each of Its Three Salespeople a Base