To compute the mean compensation, we apply the following linear transformation to sales:

$$Y = \alpha + \beta x \\ Y = 30,000 + 0.05x$$

Where Y is the transformed variable (mean compensation), X is the sales variable, β is the scale constant (\frac{0.05}{\`1`}$), and α is the shift constant.

The variance of Y, i.e., the variance of compensation, is given by:

$$\text{Var}(Y) = \text{Var}(\alpha + \beta x) = \beta^2 \text{Var}(X) = \beta^2 \sigma^2$$

The variance of sales, [Var(X) = σ] is 5,000,000. Thus,

$$\text{Var}(Y) = 0.05^2 \times 5,000,000 = 12,500$$

Standard deviation is equal to the square root of the variance, and therefore the standard deviation of employee bonuses is equal to the square root of 12,500 or $111.8