Sales Commission Structures Overview

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Questions and Answers

What is the primary characteristic of straight commission?

It requires a minimum sales target.

It is based on a flat fee.

It includes a base salary.

It is tied to a salesperson's performance. (correct)

How much commission does Mike earn if he sells appliances totaling ₱20,500 at a 20% commission rate?

₱4,100 (correct)

₱5,500

₱4,000

₱3,100

In a salary plus commission structure, what does a salesperson receive in addition to their base salary?

A commission based solely on weekly performance

A percentage of total sales (correct)

A fixed annual bonus

A flat fee per sale

What will be the commission for a salesman who sells a car worth ₱95,000 at a 4% commission rate?

₱3,800 Signup and view all the answers

If a salesperson has a base salary of ₱2,000 and earns 10% commission on sales exceeding ₱20,000, how much will they earn if they sell ₱26,000 worth of goods?

₱2,600 Signup and view all the answers

What type of commission involves both a basic salary and a commission for performance?

Salary plus Commission Signup and view all the answers

What is the commission rate if a salesperson earns ₱600 from sales above ₱20,000 and these sales amount to ₱26,000?

10% Signup and view all the answers

What does a quota commission typically involve?

Meeting set sales targets Signup and view all the answers

What is the total monthly earnings of a retail sales associate who sells $20,000 worth of merchandise at a commission rate of 3%?

$3,100 Signup and view all the answers

How much does a freelance graphic designer earn from a project worth $10,000 if they earn 20% of the contract value?

$2,000 Signup and view all the answers

What is the commission earned by a salesperson who surpasses their quarterly sales target of $150,000 by selling $180,000?

$3,000 Signup and view all the answers

What type of commission system requires the salesperson to receive payment only after the customer has paid for their purchase?

Cash Basis Commission Signup and view all the answers

How much commission does a salesperson earn if they sell 10 cellphones costing ₱18,000 each at a commission rate of 6.1%?

₱10,980 Signup and view all the answers

If Linda sells 2 cars each week at $30,000 with a 4% commission, what is her total commission after 4 weeks?

$9,600 Signup and view all the answers

What happens to a salesperson's earnings if they do not bring in any new projects in a month?

They do not earn anything. Signup and view all the answers

In what scenario does a salesperson earn commission based on installment payments?

When payments are made in stages over time. Signup and view all the answers

How much commission did Charles earn for his first ₱20,000 in sales?

₱400 Signup and view all the answers

What was the total gross pay for the saleswoman who sold ₱26,575 worth of merchandise?

₱11,093.31 Signup and view all the answers

What is the total commission for the real estate agency on a sale of ₱2,800,000?

₱74,000 Signup and view all the answers

What percentage commission does the pharmaceutical sales representative earn for sales over $100,000?

5% Signup and view all the answers

If the saleswoman sold ₱6,000 worth of merchandise, what would her additional commission be?

₱27.75 Signup and view all the answers

What calculation method gives the total commission for a sale exceeding ₱1,000,000 in a one-time payment structure?

Calculating each tier separately and summing them Signup and view all the answers

What is the commission rate for sales between ₱20,000 and ₱50,000 as seen in Charles's compensation structure?

3% Signup and view all the answers

How is quota-based commission structured, according to the provided content?

Percentages applied only to sales above a predetermined threshold Signup and view all the answers

What is the total commission Mike receives over the six months for selling 10 cellphones?

₱9,450 Signup and view all the answers

What is the commission percentage for Mike during the first month?

2% Signup and view all the answers

How much commission does Mike earn in the fifth month?

₱480 Signup and view all the answers

What commission rate does Mike earn in the third month?

1.7% Signup and view all the answers

Samantha's base monthly salary is ₱25,000. If she sells jewelry worth ₱150,000, what is her commission on sales up to ₱100,000?

₱4,000 Signup and view all the answers

What is the total commission Samantha earns on the sales above ₱100,000 if she sold ₱150,000 worth of jewelry?

₱1,500 Signup and view all the answers

What is the total salary for Samantha in a month, including her base salary and total commissions from her jewelry sales?

₱28,500 Signup and view all the answers

What additional commission does James earn on properties that sell for more than ₱5,000,000?

1.0% Signup and view all the answers

Study Notes

Types of Commission

Straight Commission: A salesperson earns a percentage of their total sales.
Salary Plus Commission: A salesperson earns a fixed salary plus a percentage of their sales.
Graduated Commission: A salesperson earns a higher commission rate on sales that exceed certain thresholds.
Quota Commission: A salesperson earns a commission on sales above a predetermined quota.

Commission on Cash Basis

Commission is paid when the customer pays in full for the product or service.

Commission on Installment Basis

Commission is paid in stages, aligning with the customer's installment payments.

Examples

Mike sells 10 cellphones for ₱18,000 each on an installment plan with 6 equal payments over 6 months.
- Mike earns a 2% commission on the first month's payment for each phone.
- The commission decreases by 0.30% for each subsequent month, based on the outstanding balance.
- Mike's total commission for the 6-month period is calculated by summing the commission earned each month.
Samantha sells ₱150,000 worth of jewelry and earns a 4% commission on sales up to ₱100,000 and a 7% commission on sales above ₱100,000.
- Her commission on sales up to ₱100,000 is ₱4,000.
- Her commission on sales above ₱100,000 is ₱3,500.
- Her total salary for the month, including her base salary and commissions, is ₱32,500.
James sells a property for ₱7,000,000 and earns a 2.5% commission on the entire sale and an additional 1% commission on the portion of the sale above ₱5,000,000.
- His commission on the first ₱5,000,000 is ₱125,000.
- His additional commission on the remaining ₱2,000,000 is ₱20,000.
- His total commission is ₱145,000.

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Description

This quiz explores various types of sales commission structures, including straight commission, salary plus commission, graduated commission, and quota commission. It also covers payment methods for commissions, such as cash and installment basis, along with practical examples to illustrate these concepts.