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27 October, 11:11

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.)

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  1. 27 October, 11:49
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    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.
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