Commission pp. 103-105 1-6 SECTION. Copyright © Glencoe/McGraw-Hill MBA, Section 1- 6, Slide 2 of...
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Transcript of Commission pp. 103-105 1-6 SECTION. Copyright © Glencoe/McGraw-Hill MBA, Section 1- 6, Slide 2 of...
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Commission pp. 103-1051-6SECTIONSECTION
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Copyright © Glencoe/McGraw-Hill MBA, Section 1- 6, Slide 2 of 16
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Section ObjectiveSection ObjectiveCalculate:
• straight commission
Determine:
• gross pay
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Copyright © Glencoe/McGraw-Hill MBA, Section 1- 6, Slide 3 of 16
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commission (p. 103)
An amount of money paid to an employee for selling a product or service.
commission rate (p. 103)
A specified amount of money paid to an employee for each sale made or a percent of the total value of sales made.
Key Words to KnowKey Words to Know
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Copyright © Glencoe/McGraw-Hill MBA, Section 1- 6, Slide 4 of 16
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straight commission (p. 103)
Pay that consists only of money earned on commission.
Key Words to KnowKey Words to Know
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Copyright © Glencoe/McGraw-Hill MBA, Section 1- 6, Slide 5 of 16
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Commission = Total Sales × Commission Rate
FormulaFormula
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Copyright © Glencoe/McGraw-Hill MBA, Section 1- 6, Slide 6 of 16
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What are the risks involved in working on commission?
The Road to Building Castles p. 103The Road to Building Castles p. 103
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Copyright © Glencoe/McGraw-Hill MBA, Section 1- 6, Slide 7 of 16
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Milton Arps sells real estate at a 7½ percent straight commission. Last week his sales totaled $290,000.
What was his commission?
Example 1Example 1
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Copyright © Glencoe/McGraw-Hill MBA, Section 1- 6, Slide 8 of 16
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Step: Find the commission.
Total Sales × Commission Rate
$290,000 × 7½%
$290,000 × 0.075 = $21,750
Example 1 AnswerExample 1 Answer
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Copyright © Glencoe/McGraw-Hill MBA, Section 1- 6, Slide 9 of 16
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Owen Theil is guaranteed a minimum salary of $250 a week, or 7 percent of his total sales, depending on whichever is greater.
What was his gross pay for a week in which his total sales were $3,614?
Example 2Example 2
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Copyright © Glencoe/McGraw-Hill MBA, Section 1- 6, Slide 10 of 16
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Find the commission.
Total Sales × Commission Rate
$3,614 × 7% = $252.98
Example 2 Answer: Example 2 Answer: Step 1Step 1
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Copyright © Glencoe/McGraw-Hill MBA, Section 1- 6, Slide 11 of 16
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Find the gross pay.
Salary or Commission
$250 or $252.98
Gross pay is $252.98 (the greater amount).
Example 2 Answer: Example 2 Answer: Step 2Step 2
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Copyright © Glencoe/McGraw-Hill MBA, Section 1- 6, Slide 12 of 16
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Jermaine Dixon sells electronic equipment. He receives a straight commission of 6½ percent of his total sales.
What commission will he receive in a week where his sales total $12,416?
Practice 1Practice 1
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$807.04
Practice 1 AnswerPractice 1 Answer
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Copyright © Glencoe/McGraw-Hill MBA, Section 1- 6, Slide 14 of 16
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Ryan O’Malley is paid either a commission or by the hour, whichever is greater. His hourly pay is $8.00 per hour with time and a half for all hours that exceed 40 hours per week. His commission is 7 percent of his sales. Find his gross pay in a week in which he worked 48 hours. His total sales for the week were $6,120.
Practice 2Practice 2
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Copyright © Glencoe/McGraw-Hill MBA, Section 1- 6, Slide 15 of 16
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$428.40
Practice 2 AnswerPractice 2 Answer
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Commission1-6END OF SECTIONEND OF SECTION