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 for each salespeople, we need to multiply their sales by 10 percent:

Salesperson 1: $8,000 x 0.1 = $800 commission
Salesperson 2: $7,500 x 0.1 = $750 commission
Salesperson 3: $12,000 x 0.1 = $1,200 commission

Total commission for the month of August: $800 + $750 + $1,200 = $2,750

To calculate the total salary and commission cash payments for September, we add the base salaries and the commissions earned in August:

Total salary and commission cash payments for September:
$1,000 x 3 = $3,000 (base salaries)
$2,750 (commissions earned in August)
Total: $3,000 + $2,750 = $5,750

However, we need to subtract the commission earned by salespeople in August since it is paid the month following the month of sale:

$5,750 - $2,750 = $3,000

Therefore, the correct answer is C) $4,400.

Holman Company Pays Each of Its Three Salespeople a Base