Commission Structures and Calculations

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Questions and Answers

What is the total monthly earnings of a retail sales associate who sells $20,000 worth of merchandise while receiving a fixed salary of $2,500 and a 3% commission?

$3,100 (correct)

$4,000

$2,800

$3,500

How is the commission calculated for a freelance graphic designer at ABC Company?

A percentage of the project's value (correct)

An hourly wage depending on hours worked

A fixed salary per project

A flat rate for each completed design

What is the commission earned by a tech company salesperson who sells $180,000, given that they have a quarterly sales target of $150,000 and receive a 10% commission on sales beyond the target?

$3,500

$2,500

$4,000

$3,000 (correct)

When does a salesperson in a cash basis commission structure receive their commission?

Only after the customer pays in full Signup and view all the answers

What total commission does Samuel earn for selling 10 cellphones costing ₱18,000 each at a 6.1% commission rate?

₱10,980 Signup and view all the answers

If Linda sells 2 cars each week for 4 weeks at a price of $30,000 per car with a 4% commission, what is her total commission?

$9,600 Signup and view all the answers

What is a key characteristic of commission on an installment basis?

Commission is paid as customer makes payments Signup and view all the answers

What would be the commission for a salesperson who sells a product for $50,000 with a 5% commission rate?

$2,500 Signup and view all the answers

What is the total commission Mike earns from selling 10 cellphones over the 6 months?

₱9,450 Signup and view all the answers

What amount does Mike receive as commission for the second month?

₱2,550 Signup and view all the answers

In the last month, how much does Mike earn as a commission?

₱150 Signup and view all the answers

What commission rate does Samantha earn on sales up to ₱100,000?

4% Signup and view all the answers

How much commission does Samantha make on sales above ₱100,000 on a total sale of ₱150,000?

₱3,500 Signup and view all the answers

What is James's total commission on selling a property priced at ₱6,000,000?

₱150,000 Signup and view all the answers

During the first month, what total commission does Mike generate from selling 10 cellphones?

₱3,600 Signup and view all the answers

What is the commission structure for Mike's earnings over the 6 months?

Decreases by 0.30% each month Signup and view all the answers

What is the primary characteristic of a straight commission?

It rewards only the completion of sales without a salary. Signup and view all the answers

If a salesperson earns 20% commission on sales and sells goods worth ₱50,000, what is the commission earned?

₱5,000 Signup and view all the answers

What does the salary plus commission structure depend on?

A basic salary plus additional earnings from sales. Signup and view all the answers

How is the commission calculated for a sale of ₱95,000 with a 4% commission rate?

₱3,800 Signup and view all the answers

If Joshua's sales for the week total ₱26,000 and he earns 10% commission on sales above ₱20,000, what is his commission?

₱600 Signup and view all the answers

Which of the following describes a quota commission?

A predetermined target that needs to be met for additional commission. Signup and view all the answers

What calculation is necessary to determine the gross pay when utilizing a salary plus commission structure?

Calculating total sales above the base limit and adding it to the salary. Signup and view all the answers

In a salary plus commission system, if a salesperson does not exceed the sales threshold, what will affect their earnings?

They earn only the fixed salary. Signup and view all the answers

What is the total commission earned by Charles if he sells a total of ₱60,000?

₱1,800 Signup and view all the answers

How much commission does the real estate agency receive on a sale of ₱2,800,000?

₱74,000 Signup and view all the answers

What is the gross pay of the saleswoman who sold ₱26,575 in merchandise?

₱11,093.31 Signup and view all the answers

Which commission structure involves an increasing percentage based on the amount sold?

Graduated Commission Signup and view all the answers

If a sales representative sells ₱130,000 in one month, what would be their total commission?

₱3,000 Signup and view all the answers

What would be the commission for the saleswoman if she only sold ₱4,500 worth of merchandise?

₱0 Signup and view all the answers

Which statement about the graduated commission structure is true?

The percentage increases as total sales increase. Signup and view all the answers

What is the basis for calculating the commission in a quota-based system?

Sales above a certain predetermined threshold. Signup and view all the answers

Study Notes

Commission

A fee businesses pay salespersons (agents) in exchange for services
Commission can be based on a flat arrangement or a percentage of the revenue generated by a salesperson.

Types of Commission

Straight Commission: A salesperson's income is solely based on a percentage of their sales.
Salary Plus Commission: A salesperson receives a fixed salary plus a percentage of sales.
Graduated Commission: Commission rates increase as sales volume increases, with different percentage rates for different sales tiers.
Quota Commission: Salespeople earn commission only on sales exceeding a predetermined quota.

Computing Commissions on Cash Basis

Commissions are paid immediately after a customer makes a full payment for the product or service.
Straight commission calculations are used here, where the percentage of the sale is the commission.

Commission on Installment Basis

Commissions are paid in stages, aligned with customer payments.
Commission rates may change based on installment number.

Example Applications

Samantha's Commission:
- Commission up to ₱100,000: ₱100,000 x 4% = ₱4,000
- Commission above ₱100,000: (₱150,000 - ₱100,000) x 7% = ₱3,500
- Total Salary: ₱25,000 (base) + ₱4,000 + ₱3,500 = ₱32,500
James's Commission:
- Commission on sales up to ₱5,000,000: 2.5%
- Additional commission on sales above ₱5,000,000: 1%

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Description

This quiz covers various types of sales commissions, including straight, salary plus, graduated, and quota commission. You will also learn about computing commissions on a cash and installment basis. Test your knowledge on how commissions influence sales strategies and earnings.