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Velma is an Account Manager for Sherwin Williams paint. For the month, Velma sold paint that...

Velma is an Account Manager for Sherwin Williams paint. For the month, Velma sold paint that totaled $41,943 in sales. The cost of goods sold of this paint was 80%, so she generated 20% of sales as profit (or gross margin) for the company. Velma is paid 42% straight commission based on her profit. What is the total of her monthly compensation? (round to nearest dollar)

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Answer #1

Solution:
Given in the Question
Total Sales = $41943
Cost of Good sold = 80% of the Sales i.e. ($41943*80%) = $33554.4
Profit on Sale = 20% of the Sales i.e. ($41943*20%) = $8388.6

Velma monthly compensation = 42% of Profit on Sale i.e. ($8388.6*42%) = $3523.212 or 3523
So Total monthly compensation = $3523

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