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37 views17 pages

A 3 Commissions

Uploaded by

Alyzza
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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COMMISSIONS

Solving Word Problems


Objectives
• Illustrate different types of commissions. (ABM_BM11BS-
IIa-11)

• Compute commissions on cash and installment


basis. (ABM_BM11BS-IIa12)
ACTIVITY
Solve the following:

1. What percent of 90 is 45?


2. What is 32% of 690?
3. Two hundred thirty-two is 10% of what
number?
4. What percent of 28 is 22?
5. Forty-eight is 60% of what number?
Commission
➢is a payment based on the percentage of
sales of an agent.
➢will help 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
Formula for the Commission
Commission Rate 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 the indicated formula.
4. Substitute the given to the formula.
5. Perform the operations needed.
Different Types of
Commissions
1. Straight Commission
2. Graduated Commission
3. Salary Plus Commission
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
commission of sales that the agent
will get from the company.
Example (Straight Commission)
Nathaniel 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, Nathaniel made a sale of
Php180,000 for the month of July.
How much will be his commission?
Commission Rate = 3.2% → 0.032 (always make this a decimal point)
Total Sale = Php180,000
Formula: Commission Rate x Total Amount Sale of the Month
= 0.032 x 180,000
= Php5,760 (the commission that Nathaniel will
get for July)
GRADUATED COMMISSION
A Graduated Commission 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 3 (Graduated Commission): Rolando 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 = Php150,000

2nd Commission Rate =2.5% → 0.025 (always 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 compute for the first commission that he can get
from Php150,000. = 0.03 x 150,000 = Php 4,500
(Rolando’s first commission)

Then compute for the commission of the remaining sale.


= 0.025 x 37,000 = Php 925 (Rolando’s commission from the
remaining sale)
Add the 1st and 2nd commission to get the final commission for
month.
= Php 4,500 + Php 925 = Php 5,425 (Rolando’s total commission)
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 5 (Salary Plus Commission):

Mr. Chan 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 = Php231

Then compute now the gross pay, Commission + Monthly Salary


Php231 + Php12,000 = Php12,231
COMMISSION on Installment
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 6 (Commission on Installment Basis):

Mr. Watson 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 = Php 10,000

Formula: Commission Rate x Payment


= 0.03 x Php10,000
= Php300 is his monthly commission.
Php300 x 8 months = Php2,400 is his total commission
ARE YOU READY
FOR ANSWERS?

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