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BUSINESS MATH
SY 2020-2021
QTR2 Wk 1-2
COMMISSION

MELC/s:
1. Illustrate the different types of commission
2. Compute Commission on cash basis and commission on installment basis
3. Compute down payment, gross balance and current increase balance

Commission maintains the relationship between the employer and the employees of the firm. It facts as an
agreement between the sales people and the firm for specific targets that need to be reached. It may also serve
as the reward for the services rendered by the sales people.
Example:
Daniel is an agent. He receives a 3 % commission form the total amount of product he sells during a month.
Suppose he receives a base salary of P 12,000 every month. Calculate his commission and his total pay in the
month of August if he sold an amount of P 60,000 worth of products.
As a sales agent, Daniel will receive an amount of money for selling the product. Such amount is referred to
as commission.
To compute for the commission, simply multiply the commission rate by the total sales amount.
For Daniels Commission,
#% of (60,000)= P 1,800

To solve for the gross pay during the month of August, add the commission and the base salary,
12,000 + 1,800 =P 13,800
In sales, the amount of money received by an employee or agent for performing business transaction or
service is called commission.

DIFFERENT TYPES OF COMMISSION

1. Straight Commission
2. Graduated Commission
3. Salary Plus Commission

1. STRAIGHT COMMISSION is when a sales agent is paid a percentage of sales only.

Example:
Carla works on a “ commission only” basis and receives 3% on her monthly sales without a base salary. What is
her commission and total pay during a month when she sells P 120,000 worth of appliance, but her customer
cancelled an order for P 12,000 and returned the appliance which was already delivered?
Solution:
There are instances at which goods are returned and orders are cancelled. If it happens, the sales in not eligible
for a commission as follows:
120,000-12,000= P 108,000
So from P 108,000 sale, the commission is computed as
108,000 (0.03) = P 3,240
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2. GRADUATED COMMISSION- Some companies apply the graduated commission rates to encourage
their agents to sell more goods. Graduated commission may be increased if the agents level of sales also
increase.
Example: Mary has a monthly commission plan where she receives 2.5% on the first P 100,00 of sells
during the month and 3.5% on sales above P 100,000. If her total sales during the month is
P150,000,compute her commission.

Solution:
Compute for the commission as follows:
150,000-100,000= P 50,000

SALES AMOUNT COMMISSION RATE COMMISSION

P 100,000 0.025 2,500
P 50,000 0.035 1,750
TOTALCOMMISSION 4,250

3. SALARY PLUS COMMISSION

A salary plus commission is wen a person gets paid a salary and a percentage of his/her sales.
Example:
Mr. Cruz decides to work for ABC company that will pay him P 3,500 per week and ^ % of any sales above P
3,000. If she sold good worth P 5,000. What is his gross pay?

Solution:
5,000- 3,000 =P 2,000
His commission is 2,000(0.06) P 120
His gross pay is computed as 3,500 + 120 = P 3,620 for that week

The Down payment is a first payment that one makes when one buys something with an agreement to pay the
rest later. But how do we obtain the down payment?
Example 1: When one purchases a car or any big item not through cash but installment terms, normally, a
certain down payment is required of the buyer. Car dealers normally require a minimum down payment, which
is usually 20% of the total cost of the vehicle being purchased. The interest on the remaining balance is then
computed depending on the number of years a buyer would want to amortize the remaining balance. If a car
costs PhP1,000,000 and a minimum 20% down payment is required by the company, then the buyer will have
an initial cash out of PhP200,000; that is, 20% (1,000,000) = PhP200,000. The remaining PhP800,000 will be
amortized monthly and the amount of monthly amortization depends on the number of years the buyer will want
to pay the loan. Normally, buyers prefer a 3-year or 5-year payment period. The lesser the number of years, the
lesser the total amount of money paid as interest to the loan. But with this arrangement, the monthly
amortization will be considerably higher than when one chooses to pay the balance for longer number of years.

Book/Gross Balance
This refers to the total amount of money a bank has on deposit before adjusting for uncleared checks or
deposits, as well as reserve requirements. That is, the book balance is a measure of what the bank has on hand
before adding or subtracting regulatory obligations and items that will soon appear on its books. This is the term
used by banks to describe the amount of money available before any adjustment is made for deposits in transit,
checks that have not been cleared, and reserve requirements and interest received from “float funds”.

Example 1: A simple case of gross balance refers to what is readily available for you to use based on your bank
deposits. For example, a check amounting toPhP5,000 that has been deposited today may not be withdrawn the
next day because it has not cleared yet. If your bank passbook currently contains PhP30,000, you may not be
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able to withdraw the whole amount yet because your gross balance is only PhP25,000 since your check has not
been cleared yet.

Increased Balance
This may refer to the total amount you have to pay that includes penalties or interest incurred by unpaid
balance from a loan or payment you are supposed to have made but was not able to do so on time

Example:
As of this month’s cut-off date, the current total amount due from your purchases using your credit card
is PhP 99,386.59. The minimum required payment is 5% of the total amount due. If you pay only the minimum
required payment, a financing charge of 3.4% of the remaining balance will be charged to the next bill.
Assuming you refrain from using your credit card on any of your purchases for the next 3 months and the
financing charge of 3.4% is charged every billing period, show your expected monthly bill for the next 3
months.

INTRODUCTION
Learning Task 1a.
Directions: Fill in the blanks. Show your solutions.
_____1. What percent of 40 is 12?
_____2. What is twenty five percent of 100?
_____3. What is the sum of P 15 percent of 600 and 500?
_____4. What is the sum of P 30% of 1,000 and 25% of 4,000?
_____5. What is the sum of 10% of P 4,000, 5 % 2,000 and 600?

DEVELOPMENT:
Learning Task 2a
Complete the table below. Compute the amount of Commission.
TOTAL SALES COMMISSION RATE AMOUNT OF
COMMISSION
1 P 40,000 3% ?
2 ? 5% P 2,500
3 150,000 ? 1,000
4 ? 3.5% P 13,000
5 35,000 2% ?

Learning Task 2b:Solve the given problem.

Show your solution.
1. Christopher has a monthly commission plan where he receives 2% commission all his sales for the
month. If his sales exceeds P 40,000, a bonus of 1% of everything over P40,000 is given to him. For
sales more than P 80,000, an additional 1 % of everything over P 80,000 is received. How much is his
total commission during a month when he had total sales of P 96,500?
If you are Christopher what will you do with your commission during this pandemic? Why?

ENGAGEMENT:
Learning Task 3a.
Direction: Fill in the blanks. Choose the best answer from the box.
Commission Straight Commission Salary Plus Commission
Down Payment Graduated Commission Salary
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___________________1. When a person gets paid a salary and receive a percentage of his sales
___________________2. When a sales agent is paid a percentage of sales only.
___________________3. It maybe increased if the agents increase level of his sales
___________________4. A rewards for the services rendered by the sales people
___________________5. A first payment that one makes when one buys something with an agreement
to pay the rest later.

ASSIMILATION:
Learning Task 4a.
Direction: Encircle the best answer.
1. Sharon makes money by commission rates. She gets 17% of everything she sells. If Sharon sold 37,000
worth of items this month, what is her salary for the month?
a. 6, 000 b. 6, 150 c. 6,290 d. 7, 500
2. Jose makes 10000 a month plus some money by commission rates. He gets 6% of everything he sells. If
Jose sold 59,000 worth of items this month, what is his salary for the month?
a. 13, 500 b. 13, 540 c. 14,200 d. 16, 510
3. Maria makes money by commission rates. She gets 15% of everything she sells. If Maria sold 23,000
worth of items this month, what is her salary for the month?
a. 3450 b. 3,500 c. 3,670 d. 4.705
4. Tiffany makes money by commission rates. She gets 21% of everything she sells. If Tiffany sold 27, 000
worth of items this month, what is her salary for the month?

5. Cindy makes 9,000 a month plus some money by commission rates. She gets 10% of everything she
sells. If Cindy sold 30, 000 worth of items this month, what is her salary for the month?

REFERENCES:
Teaching Guide for Senior High School (2016).BUSINESS MATHEMATICS

Business Math – Revised Edition, Lopez, Lundag and Dagal

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