The manager of a publishing company plans to give a $23,000 bonus to the top 12 percent, $10,000 to the next 25 percent, and $6,000 to the next 8 percent of sales representatives. If the publishing company has a total of 220 sales representatives, what is the expected bonus that the company will pay?

total expected bonus = $1262800

Explanation:

given data

bonus = $23,000

Probability = 12 percent

bonus = $10,000

Probability = 25 percent

bonus = $6,000

Probability = 8 percent

total sales = 220

solution

first we get probability for bonus amount = $0

probability = 1 - (12% + 25% + 8 %)

probability = 0.55

so here Expected bonus per employee company will pay is

Expected bonus = $23000 * (0.12) + $10000 * (0.25) + $6000 * (0.08) + $0 (0.55)

Expected bonus = $5740

so total expected bonus is

total expected bonus = $5740 * 220

total expected bonus = $1262800