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Business Math - (Commission)

Commission is a form of employee compensation paid based on the amount of net sales an employee makes, either as a plain commission based solely on sales or a commission plus a fixed salary. The document also discusses overrides which provide additional compensation for managers based on the sales of employees under them, and commissions can be paid on installment sales based on customer payments collected. Homework is assigned to prepare for an upcoming quiz on costs.

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35 views10 pages

Business Math - (Commission)

Commission is a form of employee compensation paid based on the amount of net sales an employee makes, either as a plain commission based solely on sales or a commission plus a fixed salary. The document also discusses overrides which provide additional compensation for managers based on the sales of employees under them, and commissions can be paid on installment sales based on customer payments collected. Homework is assigned to prepare for an upcoming quiz on costs.

Uploaded by

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

ANNA PATRICIA F. MALTO, CPA


[email protected]
AGENDA
Understand the purpose of commission-
based compensation
Differentiate commission from salary and
overrides
Learn how to compute for commissions, gross
earnings, and overrides
COMMISSION
▪ Form of employee compensation usually of
salespersons, agents, and brokers
▪ Pay based on the amount of [net] sales an
employee makes
“The more sales made, the more money
employee takes home”
TYPES OF COMMISSION
PLAIN COMMISSION COMMISSION & SALARY
[Net] Sales Commission
x Rate of Commission + Fixed Salary
Commission Gross Earnings
OVERRIDE
▪ Form of employee compensation usually of
officers/managers who have people under
them to do the selling (e.g. product managers,
sales managers, marketing managers)
▪ See Problem 12 of Exercise Sheet 3
IF WITH OVERRIDE:
Commission xx
+ Fixed Salary xx
+ Override xx
Gross Earnings xx
COMMISSION ON INSTALLMENT SALE
▪ Commission based on collection (payment
made by the customer)
Collection for the period
x Rate of Commission
Commission
▪ See Problem 13 of Exercise Sheet 3
HOMEWORK
Prepare for Quiz 2 on Day 2 of Cycle 4
(July 23).

What is cost? What are variable and fixed


costs?

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