Commission

Commission is paid to a selling agent for selling an item. Commission-based payment is common in certain positions—sales in particular—where bringing in money is an important part of the job.

To motivate a selling agent, who can be an employee of your furniture company, you can promise him/her a portion of the sale, for example, 5%.

So if the selling agent makes a sale of ₦35,000 his/her commission will be \( \frac{5}{100} \scriptsize \: \times \: ₦35,000 \\ \scriptsize = ₦1750 \)

Example 1.8.1:

A sales representative works for an electronics company. She gets a commission of 16k in the naira. In one week she sells four memory cards at ₦6 500 each and 6 earphones at ₦9 500 each. Calculate her commission.

Solution

Total sales = 4 × ₦6 500 + 6 × ₦9 500

                    = ₦26000 + ₦57000

                    = ₦83 000

She gets 16k for every naira.

Commission = 83 000 × 16k

                   = 1 328 000k

Convert back to naira by dividing by 100

                    = ₦13 280

Example 1.8.2:

In a company called Logitech, Tinuke earns ₦78,000 a month. She also makes a \( \scriptsize 3 \frac{1}{4} \%\) commission on all sales beyond the monthly quota. If Tinuke sold goods worth N100,000 what was the total amount she was paid for the month?

Solution

Commission paid to Tinuke = \( \scriptsize 3 \frac{1}{4} \% \: \times \: 100 000 \\ = \scriptsize 3 \frac{1}{4} \: \times \: \frac{1}{100} \: \times \: 100 000 \\ = \frac{13}{4} \: \times \: \frac{1}{100}\scriptsize \: \times \: 100 000 \\ = \frac{13}{400} \scriptsize \: \times \: 100 000 \\ = \frac{13}{4} \scriptsize \: \times \: 1000 \\ = \scriptsize 13 \: \times \: 250\)

Commission paid to Tinuke = \( \scriptsize ₦3250\)

Total Amount Tinuke was paid for the month = ₦3250 + ₦78,000

= ₦81,250