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Difficulty: MediumWages, Salaries, and Commissions

A freight broker earns a weekly base salary of $600\$600. They also earn a 3%3\% commission on their first $10,000\$10,000 in freight sales for the week, and a 5%5\% commission on any sales exceeding $10,000\$10,000. If the broker secures $24,000\$24,000 in freight sales this week, what are their total gross earnings for the week in dollars?

Answer: 1600 dollars

Answer

1600
The total earnings consist of three parts: the fixed base salary (600),the3600), the 3% commission on the first 10,000 of sales (300),andthe5300), and the 5% commission on the remaining 14,000 of sales (700).Addingtheseamountstogether(700). Adding these amounts together ( 600 + 300+300 + 700) results in total gross earnings of $1,600.

Step-by-Step Solution

1
Calculate the commission earned on the first $10,000 of sales.
$300
The broker earns 3% on the first 10,000.10,000. 10,000 \times 0.03 = $300.
2
Calculate the remaining sales volume above the $10,000 threshold.
$14,000
Total sales were 24,000.Theamountover24,000. The amount over 10,000 is 24,000−24,000 - 10,000 = $14,000.
3
Calculate the commission earned on the remaining sales.
$700
The broker earns 5% on sales exceeding 10,000.10,000. 14,000 \times 0.05 = $700.
4
Calculate total gross earnings.
$1,600
Add the base salary, first-tier commission, and second-tier commission: 600+600 + 300 + 700=700 = 1,600.

Key Concept

Calculating total gross earnings involving a base salary and a tiered commission structure.
Estimated Time:1m 30s
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Topics

Wages, Salaries, and Commissions

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