Business Mathematics Brief 12th Edition by Stanley Salzman ,Gary Clendenen, Charles Miller

Exercise 169

Wages and salaries are known as time rates , while commissions are called incentive rates of pay. Explain in your own words the difference between these payment methods. (See Objective.)
OBJECTIVE Find the gross earnings using commission rate times sales. With straight commission , the salesperson is paid a fixed percent of sales. Gross earnings are found with the following formula.

The following data shows average incomes for some sales positions. However, the average probably does not mean a lot since some salespeople make far more than others. You can imagine that a mother of two young children who just started working as a real estate agent probably does not make anything near the income shown in the table, whereas a real estate agent who has worked in the business for years may make quite a bit more than that shown.