Retailer estimates that such types of failures cost

Reference no: EM13337941

Company's sales records show a volume of $710.7 million inrevenues from sales of 320,000 HDTV units sold in 2006. Theprice of the warranty extension is a flat rate of 8% of thesale price. John makes 10% commission on monthly total ofwarranties sold. John received a check for $360.40 asincentive pay for selling warranty extensions during the month ofJanuary 2007. Failure rate of HDTVs have an overall failurerate of 4% and approximately 95% of those failures are due to minorsetup or programming errors. Average labor costs fortechnicians at the store, including all overhead is $100/hr. For more serious failure a third party is contracted and the bigbox retailer estimates that such types of failures cost, onaverage, about $800 per incident, including the cost of replacementparts.

Questions

1. What is the dollar amount of warranty extensions thatJohn sold in January 2007?

Reference no: EM13337941

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