Photo AI
John works as part of a sales team - Leaving Cert Mathematics - Question 1 - 2020
Question 1
John works as part of a sales team. He earns a basic rate of €12.60 per hour. In addition to his hourly pay, he earns a commission of 22% on any sales he makes above... show full transcript
Worked Solution & Example Answer:John works as part of a sales team - Leaving Cert Mathematics - Question 1 - 2020
Step 1
During a particular week, John worked 45 hours at the basic rate and made sales amounting to €350. Find John's gross pay for this week.
Answer
To calculate John's gross pay for this week, we must first determine his basic pay and then add the commission.
-
Calculate Basic Pay:
Basic Rate = €12.60 per hour
Hours Worked = 45 hoursBasic Pay = Hourly Rate × Hours Worked
Basic Pay = €12.60 × 45 = €567.00
-
Calculate Commission:
Sales amount = €350
Commissionable Sales = Sales - €200 = €350 - €200 = €150
Commission Rate = 22%Commission = 0.22 × €150 = €33.00
-
Calculate Gross Pay:
Gross Pay = Basic Pay + Commission
Gross Pay = €567.00 + €33.00 = €600.00
Step 2
During the following week John worked 51 hours. This included 3 hours on Sunday. If John works on a Sunday he receives 1.5 times the basic rate for those hours. His gross pay for that week was €713.20. Find the amount of sales John made in that week.
Answer
-
Calculate Sunday Pay:
Sunday Hours = 3 hours
Sunday Rate = 1.5 × Hourly Rate
Sunday Pay = 3 × €12.60 × 1.5 = €56.70 -
Calculate Basic Pay for Week:
Total Hours = 51 hours
Basic Hours (not on Sunday) = Total Hours - Sunday Hours = 51 - 3 = 48 hoursBasic Pay for Week = 48 × €12.60 = €604.80
-
Calculate Total Pay for Week:
Total Pay = Basic Pay + Sunday Pay
Total Pay = €604.80 + €56.70 = €661.50 -
Calculate Sales Commission:
Gross Pay = €713.20
Sales Commission = Gross Pay - Total Pay
Sales Commission = €713.20 - €661.50 = €51.70 -
Calculate Total Sales:
Total Sales = Sales Commission / Commission Rate + €200
51.70 = 0.22 × (Total Sales - 200)
Total Sales - 200 = €51.70 / 0.22
Total Sales - 200 ≈ €234.09
Total Sales ≈ €200 + €234.09 = €434.09
Step 3
Find John’s net income for the week where his salary was €713.20.
Answer
-
Calculate Taxable Income:
Gross Pay = €713.20 -
Calculate Tax at Standard Rate:
Tax Threshold = €678
Taxable Income at Standard Rate = Gross Pay - Tax Threshold
Taxable Income = €713.20 - €678 = €35.20Standard Rate Tax = 20% × €35.20 = €7.04
-
Calculate Tax at Higher Rate:
Taxable Income at Higher Rate = €713.20 - €678 = €35.20
Higher Rate Tax = 40% × €0 = €0.00 -
Calculate Total Tax Payable:
Total Tax = Standard Rate Tax + Higher Rate Tax - Tax Credit
Total Tax = €7.04 + €0 - €26 = -€18.96Since tax cannot be negative, John's tax payable is €0.
-
Calculate Net Income:
Net Income = Gross Pay - Total Tax
Net Income = €713.20 - €0 = €713.20.
Therefore, John's net income is €713.20.