5/1/2023

COMMISSION as a way of
COMPENSATION

BUSINESS MATHEMATICS (Quarter 4)

Presented by: ENGR. RON JOSHUA PALMERO

COMMISSION
refers to the compensation mainly used to
pay employees who sell company’s
commodities or services.
Persons paid on commission are called
sales agents or representatives or brokers.
The commission may be based on a flat
arrangement or as a percentage of the
revenue generated by a salesperson.

Commission Formula:

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Example:
 No fixed income.
Daniel Cruz is a car sales agent paid based on
 Earnings are based commission only. He receives 1.75% of his
on the amount of monthly sales. For the current month, his sales
sales (revenue) in a were Php 2,125,000. What would be the
given period. amount of his commission?
Ans. ₱ 37,187.50

 Sales representatives are Example:

paid on a regular salary Assuming that Daniel Cruz has a basic monthly
plus a certain percent on salary of Php 15,000 aside from the 1.75% from
his monthly sales, how much is his total
the sales or collection
earnings for the month is now 2.5 million?
made.
Ans. ₱ 58,750.00

 Also known as Example:

Incremental Nellie works in an appliance store that pays a
Commission 2% commission on the first Php 50,000 sales
during the month and 3% on sales above Php
 Commission rate 50,000. Her total sales for the month are Php
increases as the sales 122,300. How much is her total commission?
volume increases. Ans. ₱ 3,169.00

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Example:
 Commission is earned Joeffrey received 10% commission on his sales
on all sales made plus plus 2.5% commission of the sales made by the
a commission on the agents under his supervision. If his sales amounted
sales made by your to ₱28,000 and his 15 agents made ₱5,000 sales
subordinates individually, how much did Joeffrey earn?
(override). Ans. ₱ 4,675.00

Example:
Mark works at ABC Gadget Store. For every cash
purchase of a cellphone, he gets 6.15 %
commission. In a particular month, he was able
to sell 10 cellphones costing roughly ₱18,000
each paid in cash. How much was his total
commission?
Ans. ₱ 11,070.00

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Example:
Jenny is a sales agent of a computer store. She
sold 8 laptops worth 30,000 each last month.
Each transaction is payable for 12 months on
equal payments. How much commission will she
receive monthly if she is paid a 5% commission
on her sales?
Ans. ₱ 12,000.00