plan 'A' total compensation = x
plan 'B' total compensation = y
let z = total sales
x = 500 + 0.04z
y = 400 + 0.05z
the better offer DEPENDS on the total sales that Kenisha makes
the point at which the two plans are the same is found by making the x and y equal:
500 + 0.04z = 400 + 0.05z
100 = 0.01z
z = 10,000
so
if Kenisha sells EXACTLY $10,000 per month both plans give her the same compensation so no plan is "better"
if Kenisha sells LESS than $10,000 per month, then plan 'A' is "better" for her in terms of compensation. That is because the $100 that she gains on the base salary from plan 'A' is bigger than the 1% sales commission she loses on total sales (which is less than $10,000)
if Kenisha sells MORE than $10,000 per month, then plan 'B' is "better" for her in terms of compensation. That is because the extra 1% sales commission she makes on total sales (which is more than $10,000) is more than the $100 loss she takes on the base salary amount.
