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Business Math - W2 - Commission

This document provides information about commission-based compensation structures: 1) It defines commission and lists three types: straight commission, salary plus commission, and graduated commission. Examples of calculating each type are provided. 2) Computing commissions on a cash basis is explained, with an example of calculating commission from cash cellphone sales. 3) A short quiz with multiple choice and word problems tests the reader's understanding of commissions. Solutions to sample word problems demonstrate how to calculate commissions earned from various sales amounts.

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4K views

Business Math - W2 - Commission

This document provides information about commission-based compensation structures: 1) It defines commission and lists three types: straight commission, salary plus commission, and graduated commission. Examples of calculating each type are provided. 2) Computing commissions on a cash basis is explained, with an example of calculating commission from cash cellphone sales. 3) A short quiz with multiple choice and word problems tests the reader's understanding of commissions. Solutions to sample word problems demonstrate how to calculate commissions earned from various sales amounts.

Uploaded by

cj
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Dumaguete City National High School

Dumaguete City Division


BUSINESS MATHEMATICS
Prepared by: MISS CLAREEN JUNE E. DAGOY

Quarter 2 - Week 2
Commission

Content Standard:
The learners demonstrate an understanding of key concepts in buying and selling.

Performance Standard:
Analyze and solve problems on important factors in managing a business: buying products and selling products.

Most Essential Learning Competencies (MELC):


 Illustrate the different types of commissions
 Compute commissions on cash basis and commission on installment
 Compute down payment, gross balance and current increased balance
 Solve problems involving interests and commissions

Concept:
Prepared by: Clareen June E. Dagoy
Commission
In sales, the amount of money received by an employee or agent for performing a business transaction or
service from a company or business.

Three major types of Commission


a. Straight Commission
b. Salary plus Commission
c. Graduated Commission

a. Straight Commission – a commission when a person/agent is paid a percent of sales ONLY.

Example:
Harry receives 30% commission on the appliances ABC Company sells. If he sells a TV for ₱350, a
Refrigerator for ₱400 and a heater for ₱440, how much does Harry make from his commission?

Solution:
Given:
₱350 + ₱400 + ₱440 = ₱1190
₱350 = TV sold
₱1190 x 0.30 = ₱357
₱400 = Refrigerator sold
₱440 = Heater sold
Harry gets a commission of ₱357.00
30% = Commission

b. Salary plus Commission – base on its


type/name, a person gets paid a salary and a percent of sales.

Example:
Harry decides to work for another company that will pay him ₱350 per week and 6% of any sales above
₱3,000. If he sold goods worth ₱5688 what is his gross pay?

Solution: Sales above ₱3000 = Goods Sold – Quota


Given: = ₱5,688 - ₱3,000
₱350 = salary per week = ₱2688
₱5,668 = Goods sold Commission = Sales above ₱3,000 x Rate
6% any sales above ₱3000 = Commission =₱2,688 x 0.06
=₱161.28
Note: Gross pay is the total amount a Gross Pay = Commission + Salary per week
person gets/earns, while Net pay is the amount = ₱161.28 + ₱350
receive by a person minus all the expenses. =₱511.28

Harry gets a gross pay of ₱511.28

c. Graduated Commission – calculated into a person's pay in addition to his/her regular salary or wage.

Example:
Steve works for a company that pays him ₱500 per month and 1% on the first ₱5,000 sold, 2% on the
next ₱15,000 sold and 3% on all sales over ₱20,000. What is his gross pay if he sells ₱25,000?

Prepared by: Clareen June E. Dagoy


First commission share = ₱5000 x 0.01 (1%) = ₱50
Solution:
Second commission share = ₱15,000 x 0.02 (2%) = ₱300
Given:
1% = first ₱5,000
2% = next ₱15,000
3% = all sales over ₱20,000

Note: He was able to reach the


3% commission because he sells
₱25,000 from the company’s
business. Thus he’ll get all the
commission rates.

d. Computing Commissions
on Cash Basis – This type of commission is similar to computing straight commission.
Example:
Mike works at ABC Gadget Store. For every cash purchase of a cellphone, he gets 6.1% commission. IN
a particular month, he was able to sell 10 cellphones costing ₱18,000 each. How much was his total
commission for such cash sales?
Solution:
Total Sales = ₱18,000/cellphone x 10 cellphones
= ₱180,000

Cash commission = ₱180,000 x 6.1%


= ₱10,980

Mike’s total commission is ₱10,980

Check what you know


A. Complete the table below by supplying the missing data (2 pts. Each – just answer directly):

TOTAL SALES COMMISSION RATE AMOUNT OF COMMISSION


1. ₱40, 000 3%
2. 5% ₱2, 500
3. ₱150, 000 ₱1, 000
4. 3.5% ₱13, 000
5. ₱1, 300, 000 2%
Prepared by: Clareen June E. Dagoy
6. ₱ 35, 000 ₱ 1, 400
7. 8.2% ₱ 1, 394
8. ₱ 62, 000 ₱ 6, 875
9. 5% ₱ 962.5
10. ₱ 13, 050 13%

B. Solve the following problems and show your solution (5 points each):
1. A stock broker receives a commission of 11% for selling annuities to her clients. If she sells ₱60,000
in annuities, how much commission will she earn?

2. Patrick works at the Brick, and is paid based on his weekly sales. Last week he sold a couch for ₱800,
and a chair for ₱560, and two stoves at ₱2200 each. If Patrick earns 12.6% commission on all items sold, how
much did he make last week?

3. Barb, the assistant manager of a clothing store, earns a salary or ₱360 per month. She also receives a
5% commission on the first $9000.00 she sells, and 6% on sales over ₱9,000. If Barb sold ₱17,800 worth of
clothes last month, what was her total pay?

4. A car salesman earns a 5% commission on sales. If he sells a car for ₱29,990, how much commission
will he earn?

Prepared by: Clareen June E. Dagoy


5. A department store pays an interior designer a 25% commission for sales. How much will the
department store have to pay the interior designer if her weekly sales are ₱1,975?

Prepared by: Clareen June E. Dagoy

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