Prepared by Johnny Howard © 2015 South-Western, a part of Cengage Learning

6–2 © 2015 South-Western, a part of Cengage Learning

6–3 © 2015 South-Western, a part of Cengage Learning to Compute Commission and Total Pay 1.Multiply the commission rate by the amount sold to get the commission amount. 2.If there is a salary, add it to the commission amount to get the total gross pay. 1

6–4 © 2015 South-Western, a part of Cengage Learning

6–5 © 2015 South-Western, a part of Cengage Learning to Compute Commission When a Sale Involves Returned Goods 1.Subtract the value of the returned goods (or canceled orders) from the total sales to determine net sales. 2.Multiply the commission rate by net sales to get the commission amount. 1

6–6 © 2015 South-Western, a part of Cengage Learning

6–7 © 2015 South-Western, a part of Cengage Learning to Compute Commission Under a Graduated Rate Plan 1.Compute the dollar amount at each rate level by using subtraction. 2.Multiply each level’s sales dollars by the level’s commission rate. 3.Add the products computed in Step 2 to determine the total commission. 2

6–8 © 2015 South-Western, a part of Cengage Learning

6–9 © 2015 South-Western, a part of Cengage Learning

6–10 © 2015 South-Western, a part of Cengage Learning Computing Sales and Purchases for Principals A producer (consignor) may send goods on consignment to a consignee/agent (commission merchant) for sale at the best possible price. Gross proceeds is the amount the commission merchant gets for the consignment when sold. The commission amount returned to the consignor by the consignee is generally a certain percentage of the gross proceeds. 3

6–11 © 2015 South-Western, a part of Cengage Learning

6–12 © 2015 South-Western, a part of Cengage Learning Figure 6.1Account Sales

6–13 © 2015 South-Western, a part of Cengage Learning

6–14 © 2015 South-Western, a part of Cengage Learning Figure 6.2Account Purchase

6–15 © 2015 South-Western, a part of Cengage Learning Chapter Terms for Review account purchasegraduated commission rates account salesgross cost brokergross proceeds chargesgross sales commissionnet proceeds commission merchantnet sales consigneeprime cost consignmentprincipal consignor

6–16 © 2015 South-Western, a part of Cengage Learning Assignment 6.1: Commission A Find the commission and the total gross pay.

6–17 © 2015 South-Western, a part of Cengage Learning Assignment 6.1: Commission B Compute the total commission for the following commission payment plans.

6–18 © 2015 South-Western, a part of Cengage Learning Assignment 6.1: Commission B Compute the total commission for the following commission payment plans. (cont’d)

6–19 © 2015 South-Western, a part of Cengage Learning Assignment 6.1: Commission C Patricia Wellington is a commission merchant. She charges different commission rates to sell different types of merchandise. During May, she completed the following consignment sales for consignors. Find Patricia’s commission on each sale and the net proceeds sent to each consignor.

6–20 © 2015 South-Western, a part of Cengage Learning Assignment 6.1: Commission D Luis Castillo, a commission merchant in Dallas, buys merchandise exclusively for principals. Listed below are five recent transactions. Compute Luis’ commission on each purchase and the gross cost.

6–21 © 2015 South-Western, a part of Cengage Learning Assignment 6.2: Applications with Commission A Solve each of the following business application problems involving salespeople who are paid partly or entirely on a commission basis. Solve the problems in order, because some of the questions are sequential.

6–22 © 2015 South-Western, a part of Cengage Learning Assignment 6.2: Applications with Commission A Solve each of the following business application problems involving salespeople who are paid partly or entirely on a commission basis. Solve the problems in order, because some of the questions are sequential. (cont’d)

6–23 © 2015 South-Western, a part of Cengage Learning Assignment 6.2: Applications with Commission A Solve each of the following business application problems involving salespeople who are paid partly or entirely on a commission basis. Solve the problems in order, because some of the questions are sequential. (cont’d)

6–24 © 2015 South-Western, a part of Cengage Learning Assignment 6.2: Applications with Commission A Solve each of the following business application problems involving salespeople who are paid partly or entirely on a commission basis. Solve the problems in order, because some of the questions are sequential. (cont’d)

6–25 © 2015 South-Western, a part of Cengage Learning Assignment 6.2: Applications with Commission B Solve each of the following business applications about consignment sales and commission merchants.

6–26 © 2015 South-Western, a part of Cengage Learning Assignment 6.2: Applications with Commission C The following problems involve the purchase of a home.