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21 views10 pages

Fweek 1 M

Uploaded by

kj.kanari000
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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ILLUSTRATE TYPES OF

COMMISSIONS
&
COMPUTE COMMISSIONS
ON CASH, AND
INSTALLMENT BASIS
Commission is a payment based on the
percentage of sales of an agent.
Commission will belp the employer and
employees to have a harmonious relationship
within the company. This will serve as a reward
for the employees who will make a sale. It can
also be a driving force for the employees to do
their job efficiently and effectively.
Formula for the Commission
Commission x Total Amount Sale of the Month

Formula for the Gross Pay for the Month


Commission + Basic Salary

Steps in Computing for the Commission:


1. Analyze the problem carefully.
2. Jot down all the given.
3. Write down the indicated formula.
4. Substitute the guven to the formula.
5. Perform the operations needed.
Different Types of Commissions
1. Straight Commission
A straight Commission is a form of compensation but with no fixed salary of the
agent. It means that it is only the commissions of sales that the agent will get from the
company.

Example: Nolan works in a company with a commission only basis. His boss gave
him a 3.2% commission on his total monthly sales without a base salary. Fortunately,
Nolan made a sale of Php 180,000 for the month of July. How much will be his
commission?

Solution: Commission Rate = 3.2% -> 0.032 (always make this a decimal point)
Total Sale = Php 180,000

Formula: Commission Rate x Total Amount Sale of the Month


= 0.032 x 180,000
= Php 5,760 ( the commission that Nolan will get for July)
Different Types of Commissions
1. Straight Commission
A straight Commission is a form of compensation but with no fixed salary of the
agent. It means that it is only the commissions of sales that the agent will get from the
company.

Example: Floryn started a company with a commission basis of 2.8%. One of her
employees made a sale of Php132,000 worth of furniture last March. Unfortunately, the
customer who bought a dining table set worth Php 28,300 returned it because of some
defects. How much commission will Floryn give to her employee who made that sale?
Different Types of Commissions
2. Graduated Commission
A Graduated commission is a is a type of commission that the company gives to
their sales agent not in once but in gradual. The commission will increase if the sale of an
agent also increases. This will encourage the agent to sell more so that they can earn a
big commission.

Example: Yin is an agent with a commission of 3% on his first Php150,000 of sales


during the month and 2.5% commission on sales above Php150,000. He happened to
have a sale of Php187,000. How much will he earn?

Solution: 1st Commission Rate = 3% -> 0.03 (always make this a decimal point)
1st Sale = Php 150,000

2nd Commission Rate = 2.5% -> 0.025 (aleays make this a decimal point)
2nd Sale = Php187,000 - Php150,000 = Php37,000
Formula: Commission Rate x Sale of the Month

We first need to vompute for the first commission that he can get from Php150,000.
= 0.03 x 150,000
= Php 4,500 (Yin’s first commission)

Then compute for the commission of the remaining sale.


= 0.025 x 37,000
= 925 (Yin’s commission from the remaining sale)

Add the 1st and 2nd commission to get the final commission for the month.
= 4,500 + 925
= Php 5,425 (Yin’s total commission)
Different Types of Commissions
2. Graduated Commission
A Graduated commission is a is a type of commission that the company gives to
their sales agent not in once but in gradual. The commission will increase if the sale of an
agent also increases. This will encourage the agent to sell more so that they can earn a
big commission.

Example: Lolita has a monthly commission of 2.6% on all her total sales. The
company gives her 1% commission bonus if she reached a minimum of Php35,000,
another 1% if she also exceeds the minimum of Php75,000. How much will be her total
earnings if she happened to reach sales of Php98,000?
Different Types of Commissions
3. Salary Plus Commission
A Salary Plus Commission is when an agent gets a salary on top of the commission
he/she will get for every sale that he/she can make.

Example: Mr. Ling is working in a company with a minimum salary wage of


Php12,000 monthly. On top of his salary, he is expected to sell appliances worth
Php6,000. He can get an additional 3% commission when he exceeds his expected sales.
He fortunately made a sale worth Php13,700. How much will be his gross pay?

Solution: To compute for his commission,


Php13,700 - Php6,000 = Php7,700 x 0.03 = 231

Then compute now the gross pay, commission + monthly salary


Php231 + Php12,000 = Php12,231
Different Types of Commissions
4. Commission on Installment Basis
A Commission on Installment Basis is a commission not based on sales, but it is a
commission based on the collection or what we call payments by buyers. Installment
means that the buyers didn’t pay all at once.

Example: Mr. Gus works in a cellphone shop that offers him 3% commission on
every sale he can make. He made a sale worth Php80,000 that can be paid in an
installment of Php10,000 per month for 8 months. How much will be his monthly
commission? How much is the total commission he can get?

Solution: Commission Rate = 3% -> 0.03 (always make this a decimal point)
Monthly Payment = Php10,000

Formula: Commission Rate x Payment


= 0.03 x 10,000
= Php 300 is his monthly commission
= Php300 x 8 months
= Php2,100 is his total commission

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