SECTION 1 6 Commission pp 103 105 SECTION

SECTION 1 -6 Commission pp. 103 -105

SECTION 1 -6 Section Objective Calculate: • straight commission Determine: • gross pay MBA, Section 1 - 6, Slide 2 of 16

SECTION 1 -6 Key Words to Know 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. MBA, Section 1 - 6, Slide 3 of 16

SECTION 1 -6 Key Words to Know straight commission (p. 103) Pay that consists only of money earned on commission. MBA, Section 1 - 6, Slide 4 of 16

SECTION 1 -6 Formula Commission = Total Sales × Commission Rate MBA, Section 1 - 6, Slide 5 of 16

SECTION 1 -6 The Road to Building Castles p. 103 What are the risks involved in working on commission? MBA, Section 1 - 6, Slide 6 of 16

SECTION 1 -6 Example 1 Milton Arps sells real estate at a 7½ percent straight commission. Last week his sales totaled $290, 000. What was his commission? MBA, Section 1 - 6, Slide 7 of 16

SECTION 1 -6 Example 1 Answer Step: Find the commission. Total Sales × Commission Rate $290, 000 × 7½% $290, 000 × 0. 075 = $21, 750 MBA, Section 1 - 6, Slide 8 of 16

SECTION 1 -6 Example 2 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? MBA, Section 1 - 6, Slide 9 of 16

SECTION 1 -6 Example 2 Answer: Step 1 Find the commission. Total Sales × Commission Rate $3, 614 × 7% = $252. 98 MBA, Section 1 - 6, Slide 10 of 16

SECTION 1 -6 Example 2 Answer: Step 2 Find the gross pay. Salary or Commission $250 or $252. 98 Gross pay is $252. 98 (the greater amount). MBA, Section 1 - 6, Slide 11 of 16

SECTION 1 -6 Practice 1 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? MBA, Section 1 - 6, Slide 12 of 16

SECTION 1 -6 Practice 1 Answer $807. 04 MBA, Section 1 - 6, Slide 13 of 16

SECTION 1 -6 Practice 2 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. MBA, Section 1 - 6, Slide 14 of 16

SECTION 1 -6 Practice 2 Answer $428. 40 MBA, Section 1 - 6, Slide 15 of 16

END OF SECTION 1 -6 Commission