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23 July, 08:02

The manager of a publishing company plans to give a $23,000 bonus to the top 12 percent, $10,000 to the next 25 percent, and $6,000 to the next 8 percent of sales representatives. If the publishing company has a total of 220 sales representatives, what is the expected bonus that the company will pay?

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  1. 23 July, 11:17
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    total expected bonus = $1262800

    Explanation:

    given data

    bonus = $23,000

    Probability = 12 percent

    bonus = $10,000

    Probability = 25 percent

    bonus = $6,000

    Probability = 8 percent

    total sales = 220

    solution

    first we get probability for bonus amount = $0

    probability = 1 - (12% + 25% + 8 %)

    probability = 0.55

    so here Expected bonus per employee company will pay is

    Expected bonus = $23000 * (0.12) + $10000 * (0.25) + $6000 * (0.08) + $0 (0.55)

    Expected bonus = $5740

    so total expected bonus is

    total expected bonus = $5740 * 220

    total expected bonus = $1262800
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