Dumaguete City National High School

Dumaguete City Division

BUSINESS MATHEMATICS
Prepared by: MISS CLAREEN JUNE E. DAGOY

Quarter 2 - Week 2
Commission

Content Standard:
The learners demonstrate an understanding of key concepts in buying and selling.

Performance Standard:
Analyze and solve problems on important factors in managing a business: buying products and selling products.

Most Essential Learning Competencies (MELC):

 Illustrate the different types of commissions
 Compute commissions on cash basis and commission on installment
 Compute down payment, gross balance and current increased balance
 Solve problems involving interests and commissions

Concept:
Prepared by: Clareen June E. Dagoy
Commission
In sales, the amount of money received by an employee or agent for performing a business transaction or
service from a company or business.

Three major types of Commission

a. Straight Commission
b. Salary plus Commission
c. Graduated Commission

a. Straight Commission – a commission when a person/agent is paid a percent of sales ONLY.

Example:
Harry receives 30% commission on the appliances ABC Company sells. If he sells a TV for ₱350, a
Refrigerator for ₱400 and a heater for ₱440, how much does Harry make from his commission?

Solution:
Given:
₱350 + ₱400 + ₱440 = ₱1190
₱350 = TV sold
₱1190 x 0.30 = ₱357
₱400 = Refrigerator sold
₱440 = Heater sold
Harry gets a commission of ₱357.00
30% = Commission

b. Salary plus Commission – base on its

type/name, a person gets paid a salary and a percent of sales.

Example:
Harry decides to work for another company that will pay him ₱350 per week and 6% of any sales above
₱3,000. If he sold goods worth ₱5688 what is his gross pay?

Solution: Sales above ₱3000 = Goods Sold – Quota

Given: = ₱5,688 - ₱3,000
₱350 = salary per week = ₱2688
₱5,668 = Goods sold Commission = Sales above ₱3,000 x Rate
6% any sales above ₱3000 = Commission =₱2,688 x 0.06
=₱161.28
Note: Gross pay is the total amount a Gross Pay = Commission + Salary per week
person gets/earns, while Net pay is the amount = ₱161.28 + ₱350
receive by a person minus all the expenses. =₱511.28

Harry gets a gross pay of ₱511.28

c. Graduated Commission – calculated into a person's pay in addition to his/her regular salary or wage.

Example:
Steve works for a company that pays him ₱500 per month and 1% on the first ₱5,000 sold, 2% on the
next ₱15,000 sold and 3% on all sales over ₱20,000. What is his gross pay if he sells ₱25,000?

Prepared by: Clareen June E. Dagoy

 First commission share = ₱5000 x 0.01 (1%) = ₱50
Solution:
Second commission share = ₱15,000 x 0.02 (2%) = ₱300
Given:
1% = first ₱5,000
2% = next ₱15,000
3% = all sales over ₱20,000

Note: He was able to reach the

3% commission because he sells
₱25,000 from the company’s
business. Thus he’ll get all the
commission rates.

d. Computing Commissions
on Cash Basis – This type of commission is similar to computing straight commission.
Example:
Mike works at ABC Gadget Store. For every cash purchase of a cellphone, he gets 6.1% commission. IN
a particular month, he was able to sell 10 cellphones costing ₱18,000 each. How much was his total
commission for such cash sales?
Solution:
Total Sales = ₱18,000/cellphone x 10 cellphones
= ₱180,000

Cash commission = ₱180,000 x 6.1%

= ₱10,980

Mike’s total commission is ₱10,980

Check what you know

A. Complete the table below by supplying the missing data (2 pts. Each – just answer directly):

TOTAL SALES COMMISSION RATE AMOUNT OF COMMISSION

1. ₱40, 000 3%
2. 5% ₱2, 500
3. ₱150, 000 ₱1, 000
4. 3.5% ₱13, 000
5. ₱1, 300, 000 2%
Prepared by: Clareen June E. Dagoy
 6. ₱ 35, 000 ₱ 1, 400
7. 8.2% ₱ 1, 394
8. ₱ 62, 000 ₱ 6, 875
9. 5% ₱ 962.5
10. ₱ 13, 050 13%

B. Solve the following problems and show your solution (5 points each):
1. A stock broker receives a commission of 11% for selling annuities to her clients. If she sells ₱60,000
in annuities, how much commission will she earn?

2. Patrick works at the Brick, and is paid based on his weekly sales. Last week he sold a couch for ₱800,
and a chair for ₱560, and two stoves at ₱2200 each. If Patrick earns 12.6% commission on all items sold, how
much did he make last week?

3. Barb, the assistant manager of a clothing store, earns a salary or ₱360 per month. She also receives a
5% commission on the first $9000.00 she sells, and 6% on sales over ₱9,000. If Barb sold ₱17,800 worth of
clothes last month, what was her total pay?

4. A car salesman earns a 5% commission on sales. If he sells a car for ₱29,990, how much commission
will he earn?

Prepared by: Clareen June E. Dagoy

 5. A department store pays an interior designer a 25% commission for sales. How much will the
department store have to pay the interior designer if her weekly sales are ₱1,975?

Prepared by: Clareen June E. Dagoy