During a year, Teri’s monthly sales compensation ranged between $19,000 and $25,

Question

During a year, Teri’s monthly sales compensation ranged between $19,000 and $25,800 per month and units sold ranged between 1,300 and 2,100 units for those same months. Required: Use the high–low method to determine Teri’s monthly salary and commission rate per unit sold and then calculate the total number of units sold in a year when Teri’s total compensation amounted to $235,650. (Round your "Commission rate" to 2 decimal places.)

Calculate total number of units sold

During a year, Teri's monthly sales compensation ranged between $19,000 and $25,800 per month and units sold ranged between 1,300 and 2,100 units for those same months. Required Use the high-low method to determine Teri's monthly salary and commission rate per unit sold and then calculate the total number of units sold in a year when Teri's total compensation amounted to $235,650. (Round your "Commission rate" to 2 decimal places.) Monthly salary Commission rate Total number of units sold 7,950 8.50 per unit

Explanation / Answer

units cost high 2,100 25,800 low -1,300 -19,000 Difference 800 6,800 Variable cost per unit = 6800/800 8.5 fixed cost = 25800 - 2100*8.5 7950 Monthly salary $7,950 commission rate 8.5 per unit total number of units sold 16,500     les number of units sold be x 8.5x +(7950*12)        =235,650 x                                        =(235,650-95,400)/8.5 16500

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