Senior High School

Business
Mathematics

Writer:
IRISHGEL M. CABASISI
Teacher II – Caduang Tete National High School
(Macabebe)
Editors:
JANE P. VALENCIA, Ed.D. – EPS – Mathematics (CHAIRMAN)
CHARIZEL T. ARCILLA – SPST-I Malino National High School
JHOANNA S. MANALOTO – T-II San Juan High School (Mexico)
Quarter 2 – Module 10:
Commissions

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 What I Need to Know

This will give you an idea of the skills or competencies you are expected to learn
in the module.

After going through this module, you are expected to:

• illustrate the different types of commissions;

• compute commissions on cash basis and commission on installment
basis;
• illustrate how to obtain down payment, gross balance, and current
increased balance; and
• solve problems involving interest and commission.

What I Know

This part includes an activity that aims to check what you already know about
the lesson to take. If you get all the answers correct (100%), you may decide to skip this
module.

Direction: Choose the letter of the correct answer. Write the letter of your answer on a
separate sheet of paper. Show your solution.

1. What do you call a type of commission where a person is paid a percentage of

his/her sales only?
a. Straight commission c. Commission
b. Commission rate d. Salary Plus Commission

2. What do you call a fee paid to person who makes a sale?

a. Straight commission c. Commission
b. Commission rate d. Salary Plus Commission

3. What do call a type of commission where a person gets paid a salary and a
percentage of his/her sales?
a. Straight commission c. Salary Plus Commission
b. Commission rate d. Graduated Commission

4. What do call a type of commission where the percentage changes based on how
much someone sells?
a. Straight commission c. Salary Plus Commission
b. Commission rate d. Graduated Commission

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 5. John is earning a commission of 3% on all his sales other than his basic salary
of ₱10,000. How much is his take home pay in a month where his sales amount
to ₱75,000?
a. ₱10,000.00 c. ₱75,000.00
b. ₱25,1200.00 d. ₱12,250.00

6. A salesman agreed to have a monthly basic pay of ₱12,000 plus a commission

of 8% on all sales above ₱75,000. How much is his take home pay in a month
where his total sales amounted to ₱120,000?
a. ₱15,600 c. ₱12,000
b. ₱3,600 d. ₱16,500

For numbers 7 – 15, compute for the amount of commission

Amount of Sales Rate of Commission Amount of Commission
1 200 4.5% (7)
3 800 8% (8)
5 260 6% (9)
8 680 8.5% (10)
12 500 12% (11)
100 000 11% (12)
174 500 10% (13)
200 500 3.5% (14)
1 000 000 2% (15)

Lesson Basic Concepts of

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 1 Commissions

When a business sells a product, it needs to know if it is making money, and

employees need to know how their pay is calculated. In this lesson, you will learn
about calculating commission.

What’s In

As a recall of our previous lesson about Interest, read and analyze the given problem
and then solve. Don’t forget to show your complete solution. Write your answers on
your notebook.

1. Jodi owes ₱58,000 loan for 2. Iwa puts ₱10,000 into a

ABZ bank. The interest rate is savings account that earns
3.25% and the loan will be 4% in interest. How much

paid off over 3 years. How will she have after 3 much will Jodi pay
months? altogether?

What’s New

Erick resigned from his job out of boredom and took a new job as a sales
representative. Believing that he will enjoy more in this new job, he didn’t really mind
what he will get. The following are the options he was offered:
1.His pay would be through straight commission basis.
2.He gets a fixed base salary plus a commission.
3.He gets paid through graduated commission
What option would he probably choose? Read analyze this module for you to be
able to help Eric to decide which option he should take.

What is It

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Commission is a fee paid to person who makes a sale. The commission is usually a
percent of the selling price. The percent is called the Commission Rate

There are 3 different types of commission. These are:

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

Straight Commission
It is a type of commission where a person is paid a percentage of his/her sales
only. Let us take a look at this example:

Example:
Karyl 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 ₱108,000 worth of appliance, compute for the commission.
Solution: The commission will be 3% of ₱108,000.
And that is, ₱108,000(0.03) = ₱3,240

Salary plus Commission

It is a type of commission where a person gets paid a salary and a percentage of
his/her sales. Let us take a look at this example:

Example:
Mr. Cueva decides to work for ABX Company that will pay him ₱3,500 per week
and 6% of any sales above ₱3,000. If he sold goods worth ₱5,000, what is his gross
pay?
Solution: ₱5,000 – ₱3,000 = ₱2,000
His commission will be 6% of ₱2,000 and that is: (₱2,000)(0.06)
Commission = ₱120
His gross pay is computed as ₱3,500 + ₱120 = ₱3,620

Graduated Commission
It is a type of commission where the percentage changes based on how much
someone sells. Most of the companies encourage their agents to sell more goods. Let
us take a look at this example:

Example:
Mary has a monthly commission plan where she receives 2.5% on the first
₱100,000 of sales during the month and 3.5% on the sales above ₱100,000. If her
total sales during the month is ₱150,000, compute her commission.

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 Solution: 150,000 – 100,000 = ₱50,000

SALES AMOUNT COMMISSION RATE COMMISSION

₱100,000 0.025 2,500
₱50,000 0.035 1,750
TOTAL COMMISSION ₱4,250

Commission on Installment Basis

All computations of commission above are on cash sales. If the sales are on
installment basis, they are giving commissions based on the payment made by the
buyers. Let’s take a look at this example:

Example:
A salesman, earning 4% commission made a sale of ₱100,000 to be paid in 5
equal monthly installments. How much will be his monthly commission?
Solution: ₱100,000 ÷ 5 = ₱20,000
4% of 20, 000 is ₱800.00
Therefore the salesman’s monthly commission is ₱800.00

Down payment, Gross Balance and Current Increased Balance

What is down payment?

A down payment is a type of payment made in cash during the onset of the
purchase of an expensive good or service. The payment represents a percentage of the
full purchase price.

What is gross balance?

A down payment is a type of payment made in cash during the onset of the
purchase of an expensive good or service. The payment represents a percentage of the
full purchase price.

What is Current Increased Balance?

A down payment is a type of payment made in cash during the onset of the
purchase of an expensive good or service. The payment represents a percentage of the
full purchase price.

What’s More

Activity 1.1 Try this!

Solve the following problems. Write your answers on your notebook. Don’t forget to
show your complete solution.

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1. Sonny works as a furniture salesman and earns a base salary of ₱1,550 per
week plus 6% commission on sales. What was Sonny’s weekly gross salary if his total
sales were ₱57,000?

2. Veronika works at Future Shop and earns ₱350 per hour plus 6% commission
on sales. Last week Veronika worked 40 hours. What was Veronika’s weekly gross
salary if her total sales were ₱25,000?

3. William earns straight commission as a real-estate agent. Last month his total
sales were ₱971,168.00. If William earns a 3% rate of commission, what was his gross
income last month?

4. Sophia earns straight commission selling cell phone contracts. Last month she
sold 341 cell phone contracts worth a total of ₱238,192.00. If Sophia earns a 5% rate
of commission, what was her gross income last month?

5. Brian is a salesman for a wholesale computer parts company. He earns straight

commission at a rate of 4%. Last month his total sales were ₱382,968.00. What was
his gross monthly income last month?

Activity 1.2 Try this!

Solve for the amount of commission. Don’t forget to show your complete solution.
Write your answers on your notebook.
Complete the table:
Amount of Sales Rate of Commission Amount of Commission
3 400 2% (1)
5 000 4% (2)
10 000 5.5% (3)
50 000 10% (4)
110 000 11% (5)

What I Have Learned

WRAP UP! Supply the necessary answers to complete the statements about
commissions. Write your answers on your notebook.

______________ is a fee paid to person who makes a sale. The commission is

usually a percent of the selling price. The percent is called the
__________________. There are 3 type of commission. These are
________________________________________.

______________ is a type of commission where a person is paid a percentage of

his/her sales only. _______________ is a type of commission where a person
gets paid a salary and a percentage of his/her sales. And lastly,

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 ___________________ is a type of commission where the percentage changes
based on how much someone sells.

What I Can Do

Solve the problem. Don’t forget to show your complete solution. Write your answers on
your notebook.
Imagine that you are the CEO of a certain company. As the CEO of company, you
have decided to have a 3.5% commission on every total sales of your employees. You
wish to tabulate the total commissions of your employees by making use of the data.
Solve the given problem in order to complete the table.

SALES COMMISSION
EMPLOYEE COMMISSION
AMOUNT RATE
A 300,000 3.5%
B 250,000 3.5%
C 175,000 3.5%
D 115,000 3.5%
E 45,000 3.5%
TOTAL COMMISSIONS OF ALL EMPLOYEES

Assessment

Direction: Choose the letter of the best answer. Write the chosen letter on your
notebook.

1. What do call a type of commission where a person gets paid a salary and a
percentage of his/her sales?
a. Straight commission c. Salary Plus Commission
b. Commission rate d. Graduated Commission

2. What do call a type of commission where the percentage changes based on how
much someone sells?
a. Straight commission c. Salary Plus Commission
b. Commission rate d. Graduated Commission

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 3. What do you call a type of commission where a person is paid a percentage of
his/her sales only?
a. Straight commission c. Commission
b. Commission rate d. Salary Plus Commission

4. What do you call a fee paid to person who makes a sale?

a. Straight commission c. Commission
b. Commission rate d. Salary Plus Commission

5. A salesman agreed to have a monthly basic pay of ₱12,000 plus a commission

of 8% on all sales above ₱75,000. How much is his take home pay in a month
where his total sales amounted to ₱120,000?
a. ₱12,000 c. ₱15,600
b. ₱3,600 d. ₱16,500

6. John is earning a commission of 3% on all his sales other than his basic salary
of ₱10,000. How much is his take home pay in a month where his sales amount
to ₱75,000?
a. ₱10,000.00 c. ₱75,000.00
b. ₱25,1200.00 d. ₱12,250.00

For numbers 7 – 15, compute for the amount of commission

Amount of Sales Rate of Commission Amount of Commission
1 500 1.3% (7)
2 200 2% (8)
4 500 2.2% (9)
5 000 3% (10)
11 500 3.6% (11)
15 000 6% (12)
25 000 11% (13)
50 000 15% (14)
56 000 20% (15)

Additional Activities

For your final task in this module, do the activity below:

Analyze the given problem. Write your answer on your notebook.

₱397,500 and she will get 1%

Rosie soldan emerald necklace that cost
₱106,000 and she will get 4%
commission. Shesold ruby earrings that cost
commission. Which piece of jewelry gives her
re commission?
mo

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