This presentation discuss the different types of commission in the Business Mathematics context.

1. COMMISSION
S
B U S I N E S S M AT H E M AT I C S
2 N D G R AD I N G W E E K 1

2. A commission is a fee that a
business pays to a salesperson
(agent) in exchange for his services
in facilitating, supervising, or
completing a sale. The commission
may be based on a flat
arrangement or as a percentage of
the revenue generated by a
salesperson. In other words,
commission is a form of payment to
an agent for services rendered.

3. Types of Commissions
Straight Commission
(also called revenue commission) It is a commission based on a percentage of
sales only. (This is very profitable if you are selling high-ticket items.)
𝐶𝑜𝑚𝑚𝑖𝑠𝑠𝑖𝑜𝑛 = 𝑇𝑜𝑡𝑎𝑙 𝑆𝑎𝑙𝑒𝑠 × 𝐶𝑜𝑚𝑚𝑖𝑠𝑠𝑖𝑜𝑛 %
Example:
Raphael earns straight commission as a real-estate agent. Last month his total
sales were P1,540,000.00. If Raphael earns a 3% rate of commission, what
was his gross income last month?

4. Juan makes money by commission rates. He gets 15% of everything he
sells. If Juan sold ₱230,000 worth of items this month, what is his salary for
the month?

5. Types of Commissions
Salary plus Commission
It is a commission in which a salesperson gets his basic salary and a
percentage of whatever sales he makes.
Example:
Renz works at Com Shop and earns P325 per hour plus 6% commission on
sales. Last week Renz worked 40 hours. What was his weekly gross salary if
his total sales were P82,400?

6. Mark makes ₱12,000 a month plus some money by commission rates. He
gets 8% of everything he sells. If Mark sold ₱60,000 worth of items this
month, what is his salary for the month?

7. Types of Commissions
Graduated Commission
It is a commission which varies according to how much sales is made.
Example:
Kenneth works in a company that pays him 2% on the first ₱20,000 sold, 3%on
the next ₱30,000 sold, and 5%on all sales beyond ₱50,000. What is his gross
pay if he sells ₱75,000?

8. Mela has a monthly commission plan under which she receives 2% of the
first P200,000 of sales during the month and 3% on sales above P200,000
for the month. If Mela has sales of P350,000 during a month, how much is
her commission.

9. Seatwork
Tell what type of commission is present and solve the given problems.
1. Jeron works as a furniture salesman and earns a base salary of P7,500 per
week plus 5% commission on sales. What was Jeron’s weekly gross salary if
his total sales were P35,750?
2. Irene sells appliances at Twin City Sales. She receives a commission of 4% for
the first P50,000, 6% for the next P100,000, and 8% beyond P150,000.
Gomez’s sales for the past month totaled P375,000. What is her commission
for the month?
3. Brix is a salesman for a wholesale computer parts company. He earns straight
commission at a rate of 4%. Last month his total sales were P152,900. What
was his gross monthly income last month?

10. Quiz #1
Tell what type of commission is involved and solve.
1.Franz works in a toy store where her monthly salary is P18,500.
She also makes 8% commission on everything she sells. How
much is her salary if she sold P248,000 this month?
2.Darwin is a sales agent in Wow Corps. He makes money by
commission rates and gets 12% of everything he sells. If
Darwin sold P1,850,000, what would be his salary?
3.Borj, the assistant manager of a clothing store, receives 5%
commission on the first P45,000 he sells, and 6% on sales over
P45,000. If Borj sold P85,000 worth of clothes last week, what
was his total pay?