Lauretta J. Fox
Manufacturers and producers of goods are not always able to sell their own products. It is necessary for them to employ agents to sell the articles for them. The pay received by the agent, or salesman, for work or services performed is called commission. Sometimes the commission is a certain amount for each article sold. Other times it is a percentage of the dollar value of the sales. That rate of percent is called the rate of commission. The total money received by the salesman for his employer is called the gross proceeds. The gross proceeds minus the commission is known as the net proceeds.
Sometimes a salesman receives a graduated commission. This means that the rate of commission increases as the amount of sales increases. For example, the rate of commission may be 8% on all sales up to $10,000 and 10% on all sales over $10,000. In many cases a salesman receives a fixed salary plus a commission.
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Example 1:
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A salesman who works on a commission basis receives 12% of his sales. How much was his commission on a sale amounting to $265?
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Solution:
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Find 12% of $265.
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Let N= the missing number.
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Change 12% to 12/100.
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Let “of” denote multiplication.
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12/100 x 265/1= N
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3180/100= N
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N = $31.80
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The salesman earned $31.80 commission.
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Example 2:
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A salesclerk receives a weekly salary of $120 plus a commission of 5% on all sales above $500 per week. During three weeks her total sales were $1540, $1235, and $1040. What were her total earnings for the three weeks?
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Solution:
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$120 x 3 = $360
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salary for three weeks
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$1540 $500 = $1040
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$1235 $500 = $ 735
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$1040 $500 = $ 540
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$1040 + $735 + $ 540 = $2315
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5/100 x 2315/1 = 11575/100 = $115.75
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commission
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$360.00 + $115.75 = $475.75
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total earnings
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Her total earnings were $475.75.
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Example 3: A salesclerk is paid an 8% commission on the first $800 of weekly sales, and a 14% commission on all sales over $800. Last week his sales were $1300. What was his commission?
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Solution:
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$1300 $800 = $500
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sales above $800
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8/100 x 800/1 = 6400/100 = $64
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commission
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14/100 x 500/1 = 7000/100 = $70
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commission
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$64.00 + $70.00 = $134.00
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total commission
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His total commission was $134.
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Solve the following set of problems.
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1. A real estate agent receives a commission of 6% of the selling price of a house. If he sells a house for $135,000 what is his commission? What are the net proceeds?
2. Complete the following table.
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Selling
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Rate of
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Amount of
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Net
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Price
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Commission
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Commission
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Proceeds
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$87,900
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5%
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$500
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$ 75
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6%
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$ 84
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10%
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$ 108
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325
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$ 300
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$500
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$1,500
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3. A salesman receives a weekly salary of $160 plus a commission of 4% on all sales above $1800. If his sales for four successive weeks were $2180, $1950, $2472, and $2200, find his total earnings from salary and commission for the four weeks.
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4. A department store clerk receives 12 1/2% commission on all merchandise sold. Last week she received $52 commission. What were her sales for the week?
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5. Mary earned a 4% commission on the first $650 of weekly sales, and a 6% commission on all sales over $650. Last week her total sales were $1165. How much commission did she receive?
