Types of Commission in Sales
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Questions and Answers

What is the formula to compute commission?

  • Commission = Total Sales Amount / Commission Rate
  • Commission = Total Sales Amount - Commission Rate
  • Commission = Total Sales Amount x Commission Rate (correct)
  • Commission = Commission Rate + Total Sales Amount

What type of commission does Zara receive?

  • Salary Plus Commission
  • No Commission
  • Graduated Commission
  • Straight Commission (correct)

What is Georgia's total pay based on her sales?

  • Php12,000
  • Php11,000
  • Php10,900 (correct)
  • Php9,500

What happens to a sale if goods are returned?

<p>The sale is not eligible for commission (B)</p> Signup and view all the answers

How much commission does Harry earn from his sales?

<p>Php357 (B)</p> Signup and view all the answers

What defines Straight Commission?

<p>A commission paid solely on sales made (D)</p> Signup and view all the answers

What is the correct calculation for Zara's total sales prior to any returns?

<p>Php204,100 (C)</p> Signup and view all the answers

Which type of commission structure might include a base salary?

<p>Salary Plus Commission (A)</p> Signup and view all the answers

What is Jen's total commission from selling two units of condominium worth Php1,203,520 and Php2,300,000?

<p>Php192,693.60 (A)</p> Signup and view all the answers

How much does Mhai earn in commission during the second month?

<p>Php2,709 (B)</p> Signup and view all the answers

What is the total amount of sales Jen made?

<p>Php3,503,520 (B)</p> Signup and view all the answers

What is the commission rate for Mhai on the first month?

<p>2.4% (C)</p> Signup and view all the answers

How much total commission does Mhai earn at the end of the installment period?

<p>Php8,442 (C)</p> Signup and view all the answers

Which of the following correctly describes how Mhai's commission is computed?

<p>On the outstanding balance and decreasing rate (B)</p> Signup and view all the answers

How much is the commission for Mhai in the third month?

<p>Php1,197 (A)</p> Signup and view all the answers

What is John’s commission from selling four units of townhouses worth Php1,502,350 each?

<p>Php389,785.50 (B)</p> Signup and view all the answers

What is the commission earned from a sale totaling Php167,600?

<p>Php12,570 (B)</p> Signup and view all the answers

How much total commission does Jane earn for sales of Php126,500?

<p>Php5,457.50 (A)</p> Signup and view all the answers

If Sean's total sales amount to Php65,238.34, what is his commission?

<p>Php2,772.63 (D)</p> Signup and view all the answers

To find the worth of items Red sold if his salary was Php19,000, which equation is used?

<p>Php4,500 ÷ 0.15 = n (D)</p> Signup and view all the answers

What is the additional commission Jane receives if her sales exceed Php75,000 by Php51,500?

<p>Php1,030 (D)</p> Signup and view all the answers

Which payment structure describes receiving a fixed salary along with a percentage of sales?

<p>Salary Plus Commission (B)</p> Signup and view all the answers

How is commission computed on a cash basis?

<p>When cash payment is received (C)</p> Signup and view all the answers

What would Jen's commission be if her total sales from two condominium units were Php3,503,520 and her commission rate is 5.5%?

<p>Php192,694.60 (A)</p> Signup and view all the answers

Flashcards

Commission

A fee paid to someone for making a sale.

Straight Commission

A payment based only on a percentage of sales, no salary.

Graduated Commission

Commission rate varies based on sales volume.

Salary Plus Commission

A fixed salary plus a percentage of sales.

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Commission Rate

Percentage of sales earned as commission.

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Total Sales

Total amount of goods or services sold.

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Commission Calculation

Multiplying the commission rate by the total sales.

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Cancelled/Returned Orders

Sales that are not eligible for commission (no sale happened).

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Graduated Commission

A commission structure where the commission percentage increases based on sales volume.

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Commission

A percentage-based payment for sales.

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Salary Plus Commission

A compensation plan combining a fixed salary and a commission on sales.

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Commission Calculation (Cash Basis)

Commission calculated based on the cash received from a completed sale.

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Total Commission

The overall commission earned, calculated by adding sales commissions.

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Commission Rate

The percentage of sales paid as commission.

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Sales Volume

The total amount of goods or services sold.

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Gross Pay

The total earnings, including salary and commission.

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Cash Basis Commission

Commission calculated on the total cash sale.

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Installment Basis Commission

Commission calculated on periodic payments from sale, usually from installments.

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Commission calculation (cash basis)

Multiply the total sales amount by the commission percentage.

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Installment sales commission

Commission on sales made via installment plans or credit terms.

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Sales agent's commission (first month)

Commission from the total selling amount multiplied by the given percentage rate.

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Sales agent's commission (subsequent months)

Commission from the outstanding balance of a sales amount that has been divided on the installment basis and multiplied by the changing commission rate.

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Total commission (installment basis)

The sum of all commission earned across each of the installment period.

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Commission rate (installment basis)

Commission percentage rate will be different every month of the installment.

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Study Notes

Different Types of Commission

  • Commission is a fee paid to someone for making a sale.
  • It's calculated by multiplying the commission rate by the total sales amount.
  • Three types of commission exist: straight, graduated, and salary plus commission.

Straight Commission

  • A sales agent is paid a percentage of sales only.
  • No base salary is involved.

Graduated Commission

  • A structure used by businesses to incentivize sales staff.
  • Increasing the percentage based on sales volume.

Salary Plus Commission

  • A person is paid a salary and a percentage of their sales.

Computing Commission on Cash Basis

  • Commission is calculated based on the cash received from a completed sale.
  • It's a fee paid by the company to salespeople for completing a sale.

Computing Commission on Installment Basis

  • Commission calculated when sales involve periodic payments
  • Used in cases of installment transactions or credit terms.
  • This method helps salespeople collect overdue accounts.

Example Calculations

  • Specific examples are provided demonstrating calculations for various commission scenarios, including scenarios with returned goods and canceled orders that don't qualify for commission. The calculations follow a formula of multiplying the total sales by the applicable percentage commission to determine the commission earned.
  • Commission rates and figures for various example scenarios are included.

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Related Documents

Lesson 4: Types of Commission PDF

Description

Explore the various types of commission structures used in sales, including straight commission, graduated commission, and salary plus commission. Understand how these methods impact sales performance and income calculations on both cash and installment bases.

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