UNIFIED SUPPLEMENTARY LEARNING MATERIALS

ABM-BUSINESS MATHEMATICS
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BUSINESS MATHEMATICS
WEEK 3

DEVELOPMENT & EDITORIAL TEAM:

REX L. MAGDALUYO

MOST ESSENTIAL LEARNING COMPETECIES

Define salary, wage, income, benefits. ABM_BM11SW-IIc-1

EXPECTATIONS

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* Define the salary, wage, income and benefits.

* Compute gross income and net income.
* Analyze and solve problems related to employee compensation.

PRETEST
Answer the following questions:
1. Raphael Mendoza is paid Php150.60 for each hour he works. What is his
gross pay for a week in which he works 43 hours?

2. Penelope Sanchez's overtime is figured on a 40-hour week. Last week she

worked 45.6 hours. This week she worked 9.7 hours on Monday, 8.3
Hours on Tuesday, 8 Hours on Wednesday, 9.1 hours on Thursday, and
8.6 hours on Friday. How many overtime hours did she work in the two
weeks?

3. Eddie Santos is paid every two weeks. For the first week of his pay period
he worked 42 hours, 4 of which were overtime hours. In the second week
he worked 40 regular hours and 7 overtime hours. His regular pay rate is
Php140.40 an hour with time-and-a-half for overtime. What are his
regular, overtime, and total wages for two weeks?

4. Karolyn Yulo is paid a salary of Php 24,600 a month. What are her total
annual earnings?

5. Larry Aldana is paid a straight commission of 6.5% on all sales. In March

his sales were Php105,000. What were his commission earnings in
March?

LOOKING BACK TO YOUR LESSON BRIEF

Take a look at the following questions:

1. Juan makes money by commission rates. He gets 15% of everything he sells.
If Juan sold PhP230,000 worth of items this month, what is his salary for
the month?
Solution: Salary = 15% (PhP230,000) = 0.15 (230,000) = PhP34,500

2. Mark makes PhP12,000 a month plus some money by commission rates. He

gets 8% of everything he sells. If Mark sold PhP60,000 worth of items this
month, what is his salary for the month?
Solution: Commission = 8% (PhP60,000) = PhP4,800.
His salary for the month = PhP12,000 + PhP4,800 =

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PhP16,800.

3. John receives PhP10,000 as monthly salary. As an agent, his monthly quota

is PhP50,000 worth of beauty products for which he gets 5% commission on
all sales beyond his monthly quota. If he sold PhP75,000 worth of beauty
products this month, what is his total salary for this month?
Solution: Sales beyond his quota = PhP75,000 – P50,000 = PhP25,000. His
commission is 5% (PhP25,000) = .05 (25,000) = 1250. His monthly salary is
PhP10,000 + PhP1250 = PhP11,250.

4. A sales agent receives PhP12,000 a month corresponding to a sales of

PhP30,000 worth of goods. Furthermore, he receives an additional 6%
commission for all sales beyond his monthly quota but not greater than
PhP50,000. An additional 3% commission is for sales beyond PhP50,000. If
his sales is PhP70,000 for the month, how much is his salary for the
month?
Solution: His first commission is 6% (PhP50,000 – P30,000) = 0.06 ( 20,000)
= PhP1,200. His second commission is 3% (PhP70,000 – PhP50,000) = 0.03
(20,000) = PhP600. His salary for the month is PhP12,000 + PhP1,200 +
PhP600 = PhP13,800.

5. A tutor at ABC Learning Center receives a monthly base pay of PhP8,000

corresponding to a PhP5,000 tutorial fee input to the Center. He gets a
share of 15% of all tutorial fees beyond the mandatory PhP15,000 input. If
each student he handles pays PhP6,000/month on tutorial fees and he has
five students for the month, how much share does he receive beyond his
base pay?
Solution: He contributes PhP6,000 x 5 = PhP30,000.
He gets a share of 15% (PhP30,000 – PhP15,000) = 0.15
( 15,000) = PhP2,250

INTRODUCTION

I. Salaries and Wages

Salaries are fixed periodical payments made to persons doing or engaged in
manual work (white – collar jobs), whereas wages are payments for manual work
that are usually temporary or casual in nature (blue – collar jobs).
Wages are usually calculated by the number of days the person has rendered
service.
A. Straight time wages - Even when a person, whether in the government or
private sector, enjoys a salary, still his rate per hour is calculated, so that if
he is late, is absent or is undertimed, the corresponding amount is deducted

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 UNIFIED SUPPLEMENTARY LEARNING MATERIALS
ABM-BUSINESS MATHEMATICS
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from his salary at the end of the month. Formula: Salary = no. of hrs. x rate
per hour
B. Overtime wages - When a person works overtime, he is given a “time and
a half”, that is, his rate is one and one half times as great as his usual rate
during regular hours.
Formula: Overtime pay = no. of overtime hrs. x rate per hour x 1½
Total pay = Salary + Overtime pay
Sample problem:
Anna Marie works as executive secretary in a Makati firm. She works from
8:30 a.m. – 5:30 p.m. with an hour break for lunch. She works 5 days a
week with a rate of P55.75 per hour. If she has no undertime, how much will
she receive for two weeks? Assuming she rendered two hours overtime daily
for 2 weeks, how much was her overtime pay?
Solution:

Number of working hours: 8:30 am – 5:30 pm  9 hrs. 9 hrs. – 1 hr. lunch

break = 8 working hours
Salary = no. of hrs. x rate per hour = (8 hrs. x P55.75) 5 days x 2 weeks =
(P446.00) 10 days = P4,460.00
3) Number of overtime hours: 2 hrs. daily for 2 weeks 2 hrs. x 5 days x 2
weeks = 20 hrs.
4) Total Pay = Salary + Overtime Pay = P4,460 + (P55.75 x 20 hrs. x 1½ ) =
P4,460 + P1,672.5 = P6,132.5
Final answer
Note: It is to be understood that an employee does not just work overtime
without the instigation or approval of management, otherwise his overtime
hours are not paid. Time Card Records A time clock is often used by offices
to stamp on the employee’s time card to show his arrival and leaving in the
morning and resumption of work in the afternoon and leaving and for any
overtime work in the evening. To figure out wage time and earnings from
time cards, time must be counted in hours and quarter hours. No credit is
given for arriving early or departing late.
Piece-Rate Wages

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Wages are paid by the number of pieces a person can produce. Formula:
Rate per piece x Number of pieces made. There are, however incentives
given to piece workers so that they would be encouraged to work faster and
produce more.
Sample problem:
Find the amount earned by each of the workers.
Worker Items Produced Rate/ Piece Incentives No. of Pcs Made
Amount Earned

Selina Shirts P70 P8/pc over 25 pcs/wk 32 a wk _____

Linda Uniforms P80 P200 bonus over 80/mo. 84 a mo. ____

Incio Vases P20 P3/pc over 15pcs/day 20 a day ____

Rado Figurines P40 P42/pc if more than 40/wk 50 a wk ____

Igme Plates P25 P5/pc over 50pcs/wk 58 a wk ____

Marta Gloves P36 P3/pc over 8pcs a day 12 a day ____

Solution: Amount earned (Selina): 32 x P70 = P2,240 Plus: 7 x P8.addt’l = P56

Amount earned = P2,296  Amount earned (Linda): 84 x P80 = P6,720 Plus: 4 x
P2.addt’l = P800 Amount earned = P7,520  Amount earned (Incio): 20 x P20 =
P400 Plus: 5 x P3.addt’l = P15 Amount earned = P415  Amount earned (Rado): 50
x P40 = P2,000 Plus: 10 x P42.addt’l = P420 Amount earned = P2,420  Amount
earned (Igme): 58 x P25 = P1,450 Plus: 8 x P5.addt’l = P40 Amount earned =
P1,490  Amount earned (Marta): 12 x P36 = P432 Plus: 4 x P3.addt’l = P12
Amount earned = P444
II. Income and Benefits
A. Define income. Income is money that an individual receives in
exchange for providing a good/service or through investing capital. Some
sources of income: 1. Farmers, fishermen and vendors earn income by
providing goods such as crops, fish and vegetables, respectively. 2.
Individuals may earn income by investing their capital in stocks, mutual
funds or bank deposits.
B. Define benefit. Benefit is employee compensation given by an
employer on top of the basic salary/wage. Note that benefits may come in
the form of cash or in kind. Examples: 1. Cash Benefits: 13th month pay,
bonuses, rice subsidy, transportation allowance 2. Non-cash benefits:
SSS/GSIS, Pag-ibig, PhilHealth.
A. Gross Income.

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The gross income of an individual refers to the total amount he/she
earned before deductions are made. Other adjustments may be payment for
loans, etc.
Examples:
a. A teacher who gets a basic monthly salary of PhP20,000 and a
living allowance of PhP2,000 per month has an annual gross income of
(20,000 x 12) + (2,000 x 12)=PhP264,000.
b. A policeman who gets a basic salary of PhP25,000 per month, a
living allowance of PhP2,500 per month and a hazard pay of PhP12,000 per
year has an annual gross income of (25,000 x 12) + (2,500 x 12) + 12,000=
PhP342,000.
B. Net Income
The net income of an individual is the difference between his/her
gross income and deductions. Example of deductions applicable are income
tax, SSS or GSIS contributions, PhilHealth and Pag-ibig contributions. The
deductions can be a fixed amount or a percentage of the basic salary.
Examples:
a. A teacher who gets a basic monthly salary of PhP20,000 and a
living allowance of PhP2,000 per month has an annual gross
income of (20,000 x 12) + (2,000 x 12)= PhP264,000. Suppose this
teacher has to pay every year PhP22,500 for income tax, PhP4,500
for PhilHealth, PhP1,200 for Pag-ibig and PhP6,975.60 for SSS
contributions, then his annual net income is 264,000 – (22,500 +
4,500 + 1,200 + 6,975.60)=PhP228,824.40. b.
b. A policeman who gets a basic salary of PhP25,000 per month, a
living allowance of PhP2,500 per month and a hazard pay of
PhP12,000 per year has an annual gross income of (25,000 12) +
(2,500 12) + 12,000= PhP342,000. Suppose this policeman has to
pay annually PhP25,000 for income tax, PhP4,500 for Philhealth,
PhP1,200 for Pag-ibig and PhP27,000 for GSIS contributions, then
his net annual income is 342,000 – (25,000 + 4,500 + 1,200
+27,000)= PhP284,000.

ACTIVITIES
Answer the following:

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1. How much is the monthly and weekly salary of an employee
earning Php 210 000.00 per annum.
2. Michael, a student is regularly earning Php 120 a week by selling
newspaper. At this rate, how much will he expect to earn in a
month? In 6 months?
3. Luis rendered an additional 3 hours overtime work on a regular
day. If he earns Php 8000.00 in a month, how much is his pay for
miles?

Sample problems:
Find the number of hours credited in each of the following stated times on a
time card.
Assume that regular are from 8:00 to 12:00 a.m. and 1:00 to 5:00 p.m.
1. 1:17 – 5:17 = 3 43/60
2. 12:52 – 5:25 = 4 hrs.
3. 8:02 – 11:50 =11 hrs. 5/6

CHECKING YOUR UNDERSTANDING

A. Find the gross earnings of the following worker paid by piece of work done.

Amount Payment per piece

1. 168 pieces Php 0.75
2. 213 pcs Php 1.05
3. 2349 pcs Php 0.235
4. 84 pcs Php 1.80 for the first 20 pieces
Php 2.10 for the next 30 pieces
Php 2.50 for all in excess of 50pieces

5. 386 pcs First 100pcs – Php 20

Next 50 pcs – Php 8
Next 50 pcs – Php 12
Next 100 pcs – Php 15.50
In excess of 300 – Php 16.80

Answer the following questions:

Salary per pay period =
Type of pay Number of Pays
Weekly 52

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Biweekly 26
Semi monthly 24
Monthly 12
Manuel Tee is a computer programmer. His annual salary is Php
420,648.00. What is his monthly salary? What is his biweekly salary?
What is his Semi-monthly salary? What is his weekly salary?
Monthly:

Biweekly:

Semi-monthly:

Weekly:

POST TEST

Directions: Read each question carefully and write your answer on the line
provided.
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 UNIFIED SUPPLEMENTARY LEARNING MATERIALS
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1. Ed Callahan is an executive at the local bank. His annual salary is Php
575,530. If Ed receives a paycheck every two weeks, what is his biweekly
salary?

2. Barbie Laban is a legal secretary. Her biweekly salary is Php 9,650.00.

What is her annual salary?

3. Carlo Mamon is an administrative assistant. She earns a weekly salary

of Php 3,412.00. She applied and was hired for an administrative
specialist position. Kelly’s annual salary in her new position will be Php
224,388.00. How much will Kelly’s weekly salary be in her new position?

4. Carla Rivera is a high school algebra teacher. Her annual salary is Php
338,625.00. If she receives a paycheck every month of the year, what is
her monthly salary?

5. Ted Ferrer mows lawns six months out of the year. His salary is Php4,
575.00 per week. What is Ted’s annual salary? ____________

6. Trisha Cruz works at the telephone company. She earns an annual

salary of Php 526,000.00. If Trisha works 50 hours a week and is paid
biweekly, how much does she earn per hour?

7. Roger Baston works for the sanitation department. He earns a salary of

Php 15, 721.00 biweekly. His boss gave him a raise that will go into effect
at the first of the year. His new annual salary will be Php 220,995.00. How
much more money will Roger make next year than this year?

8. The local machine shop hired John Dalagan as a press operator. His
annual salary is Php 234,268.00. If John is paid weekly, what is the
amount of his weekly salary?

9. Henry Sala is a defense attorney. He is paid a salary of Php 687,944.00

per year. Henry is paid on the 15th of every month. If today is June 20,
how much money has Henry earned so far this year?

10. Gary Mendoza works 43 hours every week. Her weekly salary is Php
4397.75. How much does Gary earn per hour?_________________

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 UNIFIED SUPPLEMENTARY LEARNING MATERIALS
ABM-BUSINESS MATHEMATICS
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REFERENCES

Lopez,B.R, Lundag, L.C. and Dagal, K.A (2016)

Business Math: Q.C.
Vibal Group, Inc

Villanueva, T.T., Tesorio, M.V. and Male, F.G.(2017)

Business Mathematics: V.C.
Tru-Copy Publishing House, Inc.

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