At a sales volume of 38,500 units, Choice Corporation's sales commissions (a cost that is variable with respect to sales volume) total $442,750. To the nearest whole dollar, what should be the total sales commissions at a sales volume of 35,000 units? (Assume that this sales volume is within the relevant range.)

The total sales commissions at a sales volume of 35,000 units is $403,000.

Explanation:

The first step to solve this problem is find how much the commisions are for a single sale.

At a sales volume of 38,500 units, Choice Corporation's sales commissions (a cost that is variable with respect to sales volume) total $442,750.

So for a single sale, the commissions are 442,750/38,500 = 11,5.

So for each sale, there is $11.5 in commisions.

What should be the total sales commissions at a sales volume of 35,000 units?

35000*11.5 = $403,000

The total sales commissions at a sales volume of 35,000 units is $403,000.