If a sales associate needs to earn $40,000 with expenses averaging 35% of gross income, what should their gross income goal be?

If a sales associate needs to earn $40,000 with expenses averaging 35% of gross income, what should their gross income goal be?

• A. $40,000
• B. $50,000
• C. $61,538
• D. $75,000

Answer: (C)

To determine the gross income goal needed for a sales associate to earn a net income of $40,000 with expenses averaging 35% of their gross income, it’s important to understand how to calculate gross income based on net income and expenses. First, the net income is defined as the gross income minus expenses. If the associate's expenses are 35% of their gross income, that means only 65% of their gross income remains as net income (100% - 35% = 65%). To find the gross income required, you can set up the equation where Net Income equals Gross Income minus Expenses. Since expenses represent 35% of the gross income, the equation becomes: Net Income = Gross Income - (0.35 * Gross Income) This can be simplified to: Net Income = Gross Income * (1 - 0.35) Net Income = Gross Income * 0.65 Given that the desired net income is $40,000, we can substitute that into the equation: $40,000 = Gross Income * 0.65 Next, to find the Gross Income, divide both sides by 0.65: Gross Income = $40,000 / 0.65 Gross Income

To determine the gross income goal needed for a sales associate to earn a net income of $40,000 with expenses averaging 35% of their gross income, it’s important to understand how to calculate gross income based on net income and expenses.

First, the net income is defined as the gross income minus expenses. If the associate's expenses are 35% of their gross income, that means only 65% of their gross income remains as net income (100% - 35% = 65%).

To find the gross income required, you can set up the equation where Net Income equals Gross Income minus Expenses. Since expenses represent 35% of the gross income, the equation becomes:

Net Income = Gross Income - (0.35 * Gross Income)

This can be simplified to:

Net Income = Gross Income * (1 - 0.35)

Net Income = Gross Income * 0.65

Given that the desired net income is $40,000, we can substitute that into the equation:

$40,000 = Gross Income * 0.65

Next, to find the Gross Income, divide both sides by 0.65:

Gross Income = $40,000 / 0.65

Gross Income