Types of Commission in Sales
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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</p> Signup and view all the answers

    How much commission does Harry earn from his sales?

    <p>Php357</p> Signup and view all the answers

    What defines Straight Commission?

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

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

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

    Which type of commission structure might include a base salary?

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

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

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

    What is the total amount of sales Jen made?

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

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

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

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

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

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

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

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

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

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

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

    How is commission computed on a cash basis?

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

    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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