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COMMISSION (2)

The document explains different types of sales commission structures, including Straight Commission, Graduated Commission, and Salary Plus Commission. It provides examples and calculations for each type, illustrating how commissions are calculated based on sales performance. Additionally, it covers commission overrides for sales managers and their earnings based on their sales and the sales of their subordinates.

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rica mae roxas
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4 views35 pages

COMMISSION (2)

The document explains different types of sales commission structures, including Straight Commission, Graduated Commission, and Salary Plus Commission. It provides examples and calculations for each type, illustrating how commissions are calculated based on sales performance. Additionally, it covers commission overrides for sales managers and their earnings based on their sales and the sales of their subordinates.

Uploaded by

rica mae roxas
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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COMMISSION

Commission
• In sales, it is the amount of money received by an employee or agent
for performing a business transaction or service.

• Three types of Commission


• Straight Commission
• Graduated Commission
• Salary Plus Commission
Straight Commission
• Is when a sales agent is paid a percentage of sales
only
• For Zara’s total sales:
=Php 204, 100
Php25, 340 (.10) =Php2,534.00
• Php4,500,000.00(.055) = Php247,500.00
• Php4,500,000 – Php247,500 = Php4,252,500.00
• Php5,999(.20) = Php1, 199.80
• Php3,000,000 (.04) = Php120,000
• Php3,000,000 – Php120,000 = Php2,880,000.00
A salesperson made Php890.50 selling Php6850 worth
of electronic equipment. Find the commission rate.

• Commission Rate = (Commission / Sales) * 100


• CR = (Php890.50 / Php6850) * 100
• CR = 13%
A real state agent earned a commission of
Php68,750 for selling a house. If his rate is 5%,
find the selling price of the house.
• Sales = Commission / Commission Rate
• Sales = Php68,750 / .05
• Sales = Php1,375,000
Graduated Commission
• Graduated commission structure might be used by a business in order
to provide sales staff on commission with a greater incentive to
increase sales volume.
• Graduated commission can be increased if the agent’s level of sales
will increase.
• Php40,000 (.07) = Php2,800.00
• Commission on sales above Php40,000
• Php137,589.50 – Php40,000.00 = Php97,589.50
• Php97,589.50 (.05) = Php4,879.48
• Commission on sales above Php100,000
• Php137,589.50 – Php100,000.00 = Php37,589.50
• Php37,589.50 (.02) = Php751.79

• Total Commission:
• Php2,800.00 + Php4,879.48 + Php751.79 = Php8,431.27
• Php200,000.00 (.08) = Php16,000.00

• Commission on sales above Php200,000.00


• Php450,000.00 – Php200,000.00 = Php250,000.00
• Php250,000.00 (.10) = Php25,000.00

• Total Commission:
• Php16,000.00 + Php25,000.00 = Php41,000.00
Salary Plus Commission
• Is when a person gets paid a salary and a percentage
of his/her sales.
Red decides to work for XYZ Company with a base salary
of Php14,500.00 and gets 15% of everything he sells. If he
received a total salary of Php19,000.00 for the month,
how much is the worth of items did he sell?
Blue decides to work for ABC Company with a base
salary of Php16,000.00 and gets 12% of everything he
sells. If he received a total salary of Php22,000.00 for
the month, how much is the worth of items did he sell?

• For Blue’s commission


• Php22,000 – Php16,000 = Php6,000
• For the worth of item he sold
• n(0.12) = Php6,000
• n = Php6,000 / 0.12
• = Php50,000.00
• Mayla’s annual commission
• Php250,000.00 (.09) = Php22,500

• Mayla’s gross pay


• Php30,000.00 + Php22,500.00 = Php52,500.00
• Php47,500 (.0725) = Php3,443.75

• Php10,000 + Php3,443.75 = Php13,443.75


Straight Commission

Salary plus Commission

Graduated Commission

Graduated Commission

Straight Commission
Commission on Installment
Basis
• Monthly installment
• Php189,000 / 3 = Php63,000
• 1st month commission:
• Php189,000 (.024) = Php4,536
• 2nd month commission:
• Php189,000 – Php63,000 = Php126,000
• Php126,000 (.024 - .0025)
• Php126,000 (.0215) = Php2,709
• 3rd month commission:
• Php126,000 – Php63,000 = Php63,000
• Php63,000 (.0215 - .0025)
• Php63,000 (.019) = Php1,197
• Total Commission:
• Php4,536 + Php2,709 + Php1,197 = Php8,442.00
• Czarina is a sales agent for signature bags. She was able to
sell a bag worth Php54,000 payable for 3 months and equally
divided for 3 gives. If she will get a 3% commission for the
first month and it increases by 1% every month thereafter
and computed on the outstanding balance for the month.
How much will be her total commission on the 3rd month?
What is her total commission after 3 months?
• Monthly installment
• Php54,000 / 3 = Php18,000
• 1st month commission:
• Php54,000 (.03) = Php1,620
• 2nd month commission:
• Php54,000 – Php18,000 = Php36,000
• Php36,000 (.03 + .01)
• Php36,000 (.04) = Php1,440
• 3rd month commission:
• Php36,000 – Php18,000 = Php18,000
• Php18,000 (.04 + .01)
• Php18,000 (.05) = Php900
• Total Commission:
• Php1,620 + Php1,440 + Php900 = Php3,960.00
Commission Override
• Override - a commission paid on the sales someone else makes
• Still, other salesmen have people under them doing the same job. In
this case overrides are given by their companies in addition to their
basic salary. Allowances are also given as additional incentive.
• Example 1:
Conching is a product manager with eight sales representatives under her. She earns an annual
salary of P150,000; commission of 4.5% on her own sales; and an override of 1% on her men's
sales. Find her gross earnings for the month if her total sales is P364,500 with her men able to
gain P2,854,345 sales for the month.

• Given: Annual salary = P150,000


Her sales = P364,500
Her men's sales= P2,854,345
Her commission = 4.5% of her own sales
Her override = 1% of her men's sales
• Bladie is a product manager with five sales representatives
under him. He earns an annual salary of P174,000; commission
of 3.5% on his own sales; and an override of 0.5% on his men's
sales. Find his gross earnings for the month if his total sales is
P360,000 with his men able to gain P1,540,000 sales for the
month.

• Basic Salary
• Php174,000 / 12 = Php14,500
• Commission (his own sales)
• Php360,000 (0.035) = Php12,600
• Override (his men’s sales)
• Php1,540,000 (0.005) = Php7,700
• Gross earnings
• Php14,500 + Php12,600 + Php7,700 = Php34,800
• Mercurio is a marketing manager. He earns a basic salary of P12,000 per
month. He earns a 3% commission on his own sales and a 1% override on
the sales of his men. In addition, he is granted a
transportation/representation allowance of P2,500 per month. For the
current month, his men made a total sale of P550,300. His total sales is
P250,000. Find his gross earnings for the month.

• Basic Salary
• Php12,000
• Commission (his own sales)
• Php250,000 (.03) = Php7,500
• Override (his men’s sales)
• Php550,300 (.01) = Php5,503
• Allowance
• Php2,500
• Gross Earnings
• Php12,000 + Php7,500 + Php5,503 + Php2,500 = Php27,503.00

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