Contemporary Business Mathematics For Colleges 17th Edition Deitz Test Bank 1

CHAPTER 06—COMMISSIONS
Contemporary Business Mathematics for Colleges 17th

Edition by Deitz Southam ISBN 1305506685
9781305506688
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Objective Short Answer
1. Compute the commission and the total gross pay.

Monthly Commission Monthly
Employee Salary Rate Sales Commission Gross Pay
a. Ashley, H. $1,800 6% $44,500 __________ _________
b. Bradley, R. $2,450 8% $51,600 __________ _________
c. Estrada, A. $1,050 12% $35,000 __________ _________
ANSWER: a. Commission: $2,670; Gross Pay: $4,470
b. Commission: $4,128; Gross Pay: $6,578
c. Commission: $4,200; Gross Pay: $5,250
POINTS: 3
DIFFICULTY: Moderate
LEARNING OBJECTIVES: CBMC.DEIT.6.1
NATIONAL STANDARDS: United States - BUSPROG: Analytic
KEYWORDS: Bloom's: Application

a. Finley, P. $2,380 2.5% $64,000 __________ _________
b. McGill, F. $1,325 6% $64,000 __________ _________
c. Nelson, R. $2,500 4.5% $64,000 __________ _________
POINTS: 3
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a. Pierce, D. $1,200 4.25% $72,400 __________ _________
b. Quesada, T. $0 9.5% $78,600 __________ _________
c. Sommers, P. $3,000 1.25% $116,800 __________ _________
POINTS: 3

a. Chow, S. $1,575 9% $27,600 __________ _________
b. Gomes, D. $3,250 1.5% $96,400 __________ _________
c. Okutsu, K. $2,000 4% $41,000 __________ _________
POINTS: 3
5. Compute the total commission for the following commission payment plans.
Graduated Commission Rates Sales Commission
a. 2% on sales to $100,000 $188,500 __________
5% on sales above $100,000
b. 1.5% on sales to $75,000 $176,400 __________
c. 3% on sales to $150,000 $145,000 __________
ANSWER: a. $188,500 − $100,000 = $88,500; $100,000  0.02 = $2,000;
$88,500  0.05 = $4,425; $2,000 + $4,425 = $6,425
b. $176,400 − $75,000 = $101,400; $75,000  0.015 = $1,125;
$101,400  0.03 = $3,042; $1,125 + $3,042 = $4,167
c. $145,000  0.03 = $4,350

POINTS: 2
DIFFICULTY: Challenging
a. 1% on sales to $125,000 $224,000 __________
b. 2.5% on sales to $65,000 $195,800 __________
3% from $65,000 to $130,000
3.5% on sales above $130,000
c. 1% on sales to $145,000 $252,600 __________
3% from $145,000 to $290,000
ANSWER: a. $224,000 − $125,000 = $99,000; $125,000  0.01 = $1,250;
$99,000  0.02 = $1,980; $1,980 + $1,250 = $3,230
b. $195,800 − $130,000 = $65,800; $65,000  0.025 = $1,625;
$65,000  0.03 = $1,950; $65,800  0.035 = $2,303;
$1,625 + $1,950 + $2,303 = $5,878
c. $252,600 − $145,000 = $107,600; $145,000  0.01 = $1,450;
$107,600  0.03 = $3,228; $1,450 + $3,228 = $4,678
POINTS: 2
a. 2% on sales to $60,000 $147,300 __________
4% from $60,000 to $120,000
b. 0.5% on sales to $40,000 $130,600 __________
1.5% from $40,000 to $80,000
c. 1% on sales to $75,000 $166,200 __________
2% from $75,000 to $150,000
ANSWER: a. $147,300 − $120,000 = $27,300; $60,000  0.02 = $1,200;
$60,000  0.04 = $2,400; $27,300  0.06 = $1,638;
$1,200 + $2,400 + $1,638 = $5,238

b. $130,600 − $80,000 = $50,600; $40,000  0.005 = $200;

$40,000  0.015 = $600; $50,600  0.025 = $1,265;
$200 + $600 + $1,265 = $2,065
c. $166,200 − $150,000 = $16,200; $75,000  0.01 = $750;
$75,000  0.02 = $1,500; $16,200  0.03 = $486
$750 + $1,500 + $486 = $2,736
POINTS: 2
a. 3% on sales to $25,000 $84,000 __________
5% from $25,000 to $50,000
b. 3.5% on sales to $50,000 $114,000 __________
4% from $50,000 to $100,000
c. 1% on sales to $100,000 $274,000 __________
1.5% from $100,000 to $200,000
ANSWER: a. $84,000 − $50,000 = $34,000; $25,000  0.03 = $750;
$25,000  0.05 = $1,250; $34,000  0.07 = $2,380;
$750 + $1,250 + $2,380 = $4,380
b. $114,000 − $100,000 = $14,000; $50,000  0.035 = $1,750;
$50,000  0.04 = $2,000; $14,000  0.055 = $770;
$1,750 + $2,000 + $770 = $4,520
c. $274,000 − $200,000 = $74,000; $100,000  0.01 = $1,000;
$100,000  0.015 = $1,500; $74,000  0.02 = $1,480;
$1,000 + $1,500 + $1,480 = $3,980
POINTS: 2
9. Compute the commission and gross cost for the following purchases for principals.
Prime Commission Trucking & Air Gross
Cost Rate Commission Delivery Storage Freight Cost
a. $5,350 12% __________ $62.50 $75 $0 _________
b. $24,200 6% __________ $728.00 $413 $0 _________

c. $9,650 4% __________ $91.77 $0 $209.19 _________
ANSWER: a. Commission: $642.00; Gross Cost: $6,129.50
b. Commission: $1,452.00; Gross Cost: $26,793.00
c. Commission: $386.00; Gross Cost: $10,336.96
POINTS: 3
a. $6,460 14% __________ $73.60 $86 $0 _________
b. $35,300 7% __________ $839.00 $524 $0 _________
c. $8,540 5% __________ $80.66 $0 $308.20 _________
POINTS: 3
a. $14,150 5% __________ $106.12 $275 $0 _________
b. $32,500 2% __________ $364.19 $650 $225.50 _________
c. $26,750 8% __________ $0 $98 $688.15 _________
b. Commission: $650.00; Gross Cost: $34,389.69
c. Commission: $2,140.00; Gross Cost: $29,676.15
POINTS: 3
a. $37,450 9% __________ $264.50 $575 $588.00 _________
b. $19,545 10% __________ $315.00 $166 $0 _________
c. $21,480 11% __________ $0 $1,050 $212.36 _________
ANSWER: a. Commission: $3,370.50; Gross Cost: $42,248.00
c. Commission: $2,362.80; Gross Cost: $25,105.16
POINTS: 3
a. $7,750 7% __________ $95.00 $0 $460.00 _________
b. $6,425 6% __________ $192.30 $175 $0 _________
c. $9,162 5% __________ $93.45 $0 $845.00 _________
b. Commission: $385.50; Gross Cost: $7,177.80
POINTS: 3
14. Compute the commission and net proceeds for each sale on consignment.
Gross Commission Trucking & Air Net
Sales Rate Commission Delivery Storage Freight Proceeds
a. $47,580 6% __________ $295.00 $0 $421.00 _________
b. $18,800 4.5% __________ $808.12 $150 $0 _________
c. $11,600 10% __________ $0 $125 $227.75 _________
ANSWER: a. Commission: $2,854.80; Net Proceeds: $44,009.20
b. Commission: $846.00; Net Proceeds: $16,995.88
c. Commission: $1,160.00; Net Proceeds: $10,087.25
POINTS: 3
a. $14,200 6% __________ $85.75 $0 $328.00 _________
b. $7,690 7.5% __________ $210.00 $82 $0 _________
c. $21,800 5% __________ $147.50 $0 $295.00 _________

ANSWER: a. Commission: $852.00; Net Proceeds: $12,934.25

POINTS: 3
a. $10,250 5% __________ $219.25 $105 $0 _________
b. $11,725 3% __________ $107.00 $0 $412.50 _________
c. $26,500 7% __________ $0 $425 $535.12 _________
ANSWER: a. Commission: $512.50; Net Proceeds: $9,413.25
POINTS: 3
a. $42,800 6% __________ $988.00 $650 $0 _________
b. $51,750 4% __________ $425.00 $210 $0 _________
c. $34,000 3% __________ $50.00 $0 $217.20 _________
ANSWER: a. Commission: $2,568.00; Net Proceeds: $38,594.00
b. Commission: $2,070.00; Net Proceeds: $49,045.00
POINTS: 3
18. An appliance salesperson receives a monthly salary of $2,250, plus a commission of 4.5% on all sales. Compute total
pay for a month in which she sold $98,450 worth of appliances.
ANSWER: $98,450  0.045 = $4,430.25; $4,430.25 + $2,250 = $6,680.25
POINTS: 1
DIFFICULTY: Easy
19. An insurance broker receives a monthly salary of $3,460, plus a commission of 10.5% on all sales. Compute total pay
for a month in which he sold $80,965 worth of insurance policies.
ANSWER: $80,965  0.105 = $8,501.33; $8,501.33 + $3,460 = $11,961.33
POINTS: 1
DIFFICULTY: Easy
20. A salesperson in a furniture store receives a weekly salary of $1,250. She also earns a commission of 6% on all sales
for the week and a bonus of 2% on all sales above $5,000 for the week. How much would she earn if her total sales for the
week were $9,420?
ANSWER: $9,420 − $5,000 = $4,420; $9,420  0.06 = $565.20;
$4,420  0.02 = $88.40; $565.20 + $88.40 + $1,250 = $1,903.60
POINTS: 1
21. Sylvia Jimenez is paid by commission only, and she earns 1.5% on all sales. If Sylvia sells more than $125,000 in any
month, she receives an additional 2% on the sales above $125,000. Find Sylvia's total commission for July on sales of
$180,000.
ANSWER: $180,000 − $125,000 = $55,000; $180,000  0.015 = $2,700;
$55,000  0.02 = $1,100; $2,700 + $1,100 = $3,800
POINTS: 1
22. An employee who sells advertising time for independent television stations is paid a salary of $2,000 per month. For
short commercials (less than 30 seconds), the employee receives a 0.5% commission. For long commercials (30 seconds
or longer), she receives a 1% commission. Compute her total pay for a month in which she sold $345,500 worth of time
for short commercials, and $196,000 worth of time for long commercials.
ANSWER: $345,500  0.005 = $1,727.50; $196,000  0.01 = $1,960;
$1,727.50 + $1,960 + $2,000 = $5,687.50
POINTS: 1

23. A free-lance sales representative is independent and gets paid on a commission-only basis. She earns a 5%
commission on monthly sales up to $35,000, 6% on monthly sales between $35,000 and $75,000, and 7% on monthly
sales over $75,000. Determine her commission for a month when sales were $106,450.
ANSWER: $106,450 − $75,000 = $31,450; $35,000  0.05 = $1,750;
$40,000  0.06 = $2,400.00; $31,450  0.07 = $2,201.50;
$1,750.00 + $2,400.00 + $2,201.50 = $6,351.50
POINTS: 1
24. An employment agency is seeking a newspaper advertising salesperson. The monthly pay is $2,500 salary plus a 2.5%
commission on sales up to $60,000 and 5% on sales over $60,000. The advertisement also states that normal sales should
usually be at least $75,000. What would be the total pay for a person who sold the expected minimum?
ANSWER: $75,000 − $60,000 = $15,000; $60,000  0.025 = $1,500;
$15,000  0.05 = $750; $1,500 + $750 + $2,500 = $4,750
POINTS: 1
25. Select City Run Mall is seeking a salesperson for the Xara showroom. The monthly pay of the salesperson would be
$3,800 salary plus a 3.6% commission on sales up to $80,000 and 7.2% on sales over $80,000. The job requirement also
states that normal sales should usually be at least $95,000. What would be the total pay for a person who sold the expected
minimum?
ANSWER: $95,000 − $80,000 = $15,000; $80,000  0.036 = $2,880;
$15,000  0.072 = $1,080; $2,880 + $1,080 + $3,800 = $7,760
POINTS: 1
26. Harley Dickerson sells industrial paper products and earns a 4% commission on all sales. Harley earns a 2% bonus on
sales that exceed $40,000 during a month. An additional 1% bonus is earned on any sales that exceed $90,000. Calculate
Harley's commission for a month on sales of $95,800.
ANSWER: $95,800 − $40,000 = $55,800; $95,800 − $90,000 = $5,800;
$95,800  0.04 = $3,832; $55,800  0.02 = $1,116;
$5,800  0.01 = $58; $3,832 + $1,116 + $58 = $5,006
POINTS: 1

27. A salesperson gets paid a salary of $2,150 per month, with a graduated commission plan that pays 2.5% on sales up to
$40,000, 3% on sales between $40,000 and $80,000, and 3.5% on sales over $80,000. Compute the total pay for the
salesperson during a month when sales were $106,500.
ANSWER: $106,500 − $80,000 = $26,500; $40,000  0.025 = $1,000; $40,000  0.03 = $1,200;
$26,500  0.035 = $927.50; $2,150 + $1,000 + $1,200 + $927.50 = $5,277.50
POINTS: 1
28. A home furnishings salesperson works on a commission-only basis. He earns an 11% commission on all sales that are
final, i.e., merchandise is not returned. Last month sales were $48,500, but $7,400 worth of furnishings were returned.
What was the salesperson's commission for last month?
ANSWER: $48,500 − $7,400 = $41,100; $41,100  0.11 = $4,521
POINTS: 1
DIFFICULTY: Easy
29. An employee earns a salary of $750 per week and a 4% commission on all sales. Determine the employee's total pay if
her sales for the week total $18,100.
ANSWER: $18,100  0.04 = $724; $724 + $750 = $1,474
POINTS: 1
DIFFICULTY: Easy
30. A medical representative earns a salary of $840 per week and a 7% commission on all sales. Determine the medical
representative’s total pay if his sales for the week total $27,200.
ANSWER: $27,200  0.07 = $1,904; $1904 + $840 = $2,744
POINTS: 1
DIFFICULTY: Easy
31. Mary Wallis receives a salary of $2,750, and a 1.5% commission on all of her sales in a month. In March, she sold
$325,000 worth of merchandise. Determine Mary's total pay for March.
ANSWER: $325,000  0.015 = $4,875; $4,875 + $2,750 = $7,625
POINTS: 1
DIFFICULTY: Easy
32. Diana Mortz receives a salary of $4,970, and a 2.6% commission on all of her sales in a month. In June, she sold
$444,000 worth of commodities. Determine Diana Mortz’s total pay for June.
ANSWER: $444,000  0.026 = $11,544; $11,544 + $4,970 = $16,514
POINTS: 1
DIFFICULTY: Easy
33. Yuli Lu works as commission merchant who helps businesses sell their existing office equipment, except computers.
For desks, tables, chairs and filing cabinets, Yuli charges 18% of the sales price. For printers and copiers, she charges
30%. She also deducts any delivery charges. For Harris Corp, she sold assorted furniture at $7,860 and two large copiers
for $2,450 each. The total delivery charges were $318. Compute the net proceeds that would be due to Harris Corp.
ANSWER: $7,860  0.18 = $1,414.80; 2  $2,450 = $4,900; $4,900  0.30 = $1,470;
$7,860 + $4,900 = $12,760; $12,760 − $1,414.80 − $1,470 − $318 = $9,557.20
POINTS: 1
34. A commission merchant specializing in food products sold a consignment of products for a farm. The sales price was
$18,450 with a commission rate of 12% for farm products. For this consignment, there was $890 freight that the merchant
had to pay. What were the net proceeds due to the farm?
ANSWER: $18,450  0.12 = $2,214; $2,214 + $890 = $3,104; $18,450 − $3,104 = $15,346
POINTS: 1
35. A contract merchant specializing in Stationery articles sold a consignment of articles for an office. The sales price was
$22,650 with a commission rate of 16% for office articles. For this consignment, there was $650 freight that the merchant
had to pay. What were the net proceeds due to the office?
ANSWER: $22,650  0.16 = $3,624; $3,624 + $650 = $4,274; $22,650 − $4,274 = $18,376
POINTS: 1
36. In the first quarter of the year (January through March), a commission merchant sold several consignments of
construction equipment, some used and some new. The sales price was $112,900 for the new equipment and $58,400 for
the used equipment. The merchant charges commission rates of 10% to sell new equipment and 15% to sell used

equipment. The merchant paid total freight charges of $2,490 to have the equipment delivered to the various buyers.
Compute the net proceeds from the sales.
ANSWER: $112,900 + $58,400 = $171,300; $112,900  0.10 = $11,290;
$58,400  0.15 = $8,760; $11,290 + $8,760 + $2,490 = $22,540;
$171,300 − $22,540 = $148,760
POINTS: 1
37. An interior decorator buys furniture at the "dealer price," but he charges his clients the "retail price" instead of
charging a commission. A client pays $3,000 for furniture that had a "dealer price" of $2,500. To charge the client the
same dollar amount, but calculating it as a commission, what commission rate would the decorator have to use?
ANSWER: $3,000 − $2,500 = $500;
$500  $2,500 = 0.20, or 20%
POINTS: 1
38. A landscape designer charges a modest hourly design fee. She makes the majority of her income by selling various
outdoor equipment and furniture. She adds 25% to her cost and also charges any related delivery and/or "set-up" fees. A
client selected furniture and barbecue equipment that cost the designer $3,274. In addition, there was a delivery charge of
$375 and another $247 to assemble the barbecue. Compute the total amount of the purchase.
ANSWER: $3,274  0.25 = $818.50;
$3,274 + $818.50 + $375 + $247 = $4,714.50
POINTS: 1
39. A single, working parent decides to have a home delivery service perform his weekly grocery shopping. The service
charges a fee of 6.5% of the food price, plus 50 cents per mile. In one month, for this parent, the service delivered food
worth $1,652.88 and drove a total of 98 miles. Determine the parent's total cost for the groceries and the service during
this month.
ANSWER: $1,652.88  0.065 = $107.44; $0.50  98 = $49.00;
$1,652.88 + 107.44 + $49.00 = $1,809.32
POINTS: 1

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CHAPTER 06—COMMISSIONS

Contemporary Business Mathematics for Colleges 17th

Objective Short Answer

1. Compute the commission and the total gross pay.

2. Compute the commission and the total gross pay.

3. Compute the commission and the total gross pay.

4. Compute the commission and the total gross pay.

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b. $130,600 − $80,000 = $50,600; $40,000  0.005 = $200;

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ANSWER: a. Commission: $852.00; Net Proceeds: $12,934.25

KEYWORDS: Bloom's: Application

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KEYWORDS: Bloom's: Application

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