Answer: $4,000
Explanation:
If the total earnings were $40,000 and the base pay was $10,000, then the commission earned would be $40,000 - $10,000 = $30,000.
Since the commission rate is 40%, we can set up the equation:
40% x Total Sales = Commission Earned
We know that the commission earned is $30,000, and we also know that 15 cars were sold. Therefore, we can solve for the average price of each car:
40% x Total Sales = Commission Earned
40% x (15 x Price per Car) = $30,000
6 x Price per Car = $30,000
Price per Car = $5,000
However, this is just the average price per car. Since the commission is based on the total sales, we need to calculate the actual commission earned on each car:
Commission per Car = 40% x Price per Car
Commission per Car = 40% x $5,000
Commission per Car = $2,000
Therefore, the total earnings of $40,000 divided by the number of cars sold (15) gives the amount earned per car:
Amount earned per Car = Total Earnings / Number of Cars Sold
Amount earned per Car = $40,000 / 15
Amount earned per Car = $4,000