6. Each week Ingrid earns a fixed salary and a sales commission that is a fixed percentage of her sales for that week. Ingrid has no other sources of income. Last week Ingrid's total earnings were $500 and her sales were $2,000. This week Ingrid's total earnings were $700 and her sales were $6,000. What is the percentage rate for Ingrid's sales commissions?
Answer: C
Ingrid's sales commission percentage rate is 5%.
To determine Ingrid's sales commission rate, we can analyze her earnings and sales over the two weeks. Last week, her total earnings of $500 from $2,000 in sales imply a commission of 25% on her sales, but since her total earnings include a fixed salary, we will find the commission rate by comparing her total earnings and sales this week.
A) 0.05%
This option is incorrect because a commission rate of 0.05% would yield earnings that are far too low compared to Ingrid's actual earnings from her sales. Given her sales figures, a commission rate of 0.05% would not provide earnings sufficient to reach even $500 in total earnings.
B) 4%
While this option is closer than A, it is still incorrect. A 4% commission on her sales would result in lower total earnings than what Ingrid reported. With her sales this week at $6,000, a 4% commission would only yield $240, which does not account for her fixed salary and falls short of her total earnings.
C) 5%
This is the correct answer. If Ingrid earns a 5% commission on her sales, then on $6,000 in sales, her commission would be $300. If we assume her fixed salary remains the same from last week, this aligns perfectly with her total earnings of $700 this week ($300 commission + fixed salary).
D) 20%
This option is incorrect because a 20% commission rate would yield an excessively high commission on her sales. For instance, 20% of $6,000 would result in $1,200, which would put her total earnings far above the $700 she actually earned, indicating this option is not plausible.
E) 30%
This option is also incorrect. A commission rate of 30% would result in even higher earnings than 20%, leading to a commission of $1,800 on $6,000 in sales, which again exceeds her total earnings of $700, making it impossible.
Conclusion
The correct commission rate of 5% accurately reflects the earnings reported by Ingrid in relation to her sales. All other options either significantly underestimate or overestimate her potential earnings based on the given sales figures, confirming that option C is the only viable answer.