Commissions, Royalties, & Piecework Pay

1. Commissions, Royalties, & Piecework Pay Section 6-3

2. Pay Plans • Last week, we covered: • Annual Salary – paid by the year • Hourly Pay – paid by the hour • What other types of pay plans are there? • Commission • Paid according to money from sales • Royalty • Paid according to money from sales (you are not seller) • Piecework Pay • Paid according to units produced

3. Commission • Some jobs that get paid commission: • Real Estate Agent • Salesmen for department stores • TV – Sales • Any type of sales job

4. Royalties • Some jobs that pay royalties • Author • Movie Director • Actor/Actress • Musician

5. Piecework Pay • Jobs that have piecework pay plans: • Newspaper delivery • Field workers (pick corn, strawberries, etc) • Factory workers

6. Advantages vs. Disadvantages • As an employee, what are the advantages of being paid commission or piecework? • What are the disadvantages? • As an employer, what are the advantages of being paid commission or piecework? • What are the disadvantages?

7. Calculating Commission • Huey Gaines is paid a straight commission of 6% on his sales. During February, his sales were $38,000. What was his commission? Find his commission rate: Convert the percent to a decimal: Multiply the decimal by the amount of sales: 6% 0.06 0.06 x 38,000 = $2,280

8. Calculating Commission • Melvin’s sales last month of a new tile cleaner were $9,500. If he receives a commission rate of 15% of all sales, what commission did he earn? Find his commission rate: Convert the percent to a decimal: Multiply the decimal by the amount of sales: 15% 0.15 0.15 x 9,500 = $1,425

9. Calculating Commission • Jacqueline earned 15% commission on her monthly sales of $2,870, $3,150, and $3,940. What was her total commission for all three months. First Month: Second Month: Third Month: 0.15 x 2,870 = $430.50 0.15 x 3,150 = $472.50 0.15 x 3,940 = $591 Total Commission: = $1,494

10. Calculating Commission • Liz receives a weekly salary of $200, plus 3% commission on her sales. Last week, she sold $29,700 of computer equipment. How much did she earn? Earnings = Commission + weekly Salary Commission = Weekly Salary = Earnings = = $891 0.03 x 29,700 = $200 = $891 + $200 = $1,091.00

11. Number 1 • Dan is paid straight commission of $5.75 for each item he sells. Last month he sold 103 items. How much did he make in commission: Commission = (amount for each item) x (# items sold) = (5.75) x (103( = $592.25

12. Number 2 • A student sells subscriptions for a magazine that costs $35 a year and makes a commission of $5.25 on each subscription. What percent commission does he make? What percent of 35 is 5.25? ( ) ( ) X 35 = 5.25 Multiply 35x = 5.25 x = 0.15 15%

13. Number 3 • Paul earns a commission of 9% of his sales. Last week, he had sales of $646.70, $237.58, $1,984.89, $658.66, and $953.73. What was his total commission? • Total Sales = $4,481.56 • Commission = $403.34

14. Number 4 • Jo Ann is paid a salary of $410 a week and a commission of 5.6% on all sales. Her sales last week were $67,000. What was her total earnings for the week? Commission = $3,752 Total Earnings = $4,162

15. Number 5 • Sheldon earns a salary of $150 a week and a commission of 7% on all sales. If Sheldon’s sales for one week were $6,890, what was his salary for the week? • Commission = $482.3 • Total Earnings = $632.30

16. Number 6 • Roosevelt receives a weekly salary of $600 plus 1% commission on all sales in excess of $12,500 a week. Last week his sales were $48,370. What was his total earnings? Amount in excess of $12,500 = $35,870 Commission = $358.70 Total = $958.70

17. Royalties & Piecework Pay

18. Remember • Royalties • You are paid according to sales on an item you created • Piecework Pay • You are paid according to how much you manufacture

19. Royalties • You write a children’s book and receive 10% royalty based on total sales of the book. If the book sells for $47.95 and sells 17,000 copies, how much do you receive? 1) Find total amount in sales = (Selling Price) x (# of copies sold) = (47.95) x (17,000) = $815,150 = $815,150 Find royalty amount of total sales = (10%) x (total sales) = (0.10) x (815,150) = $81,515 Total amount you receive in royalties is $81,515

20. Royalties • You direct a zombie movie and receive 5% royalty based on total sales of the movie. If the movie sells for $29.99 and sells 47,500 copies, how much do you receive? 1) Find total amount in sales = (Selling Price) x (# of copies sold) = (29.99) x (47,500) = $1,424,525 = $1,424,525 Find royalty amount of total sales = (5%) x (total sales) = (0.05) x (1,424,525) = $71,226.25 Total amount you receive in royalties is $71,226.25

21. Classwork • In book, please complete problems 2-10 on page 307

22. 2) Rock musician Donny West is paid 15% on his CD sales and tour video sales. Last year, he sold one million CD’s and 550,000 videos. The CD’s were sold to music stores for $5 and the videos sold for $6 each. What was the total amount of cd sales? What was the total amount of video sales? What was the combined total? How much did Donny receive in royalties? 1,000,000 x $5 = $5,000,000 550,000 x $6 = $3,300,000 = 5,000,000 + 3,300,000 = $8,300,000 $8,300,000 x 0.15 = $1,245,000

23. 3) Joan sells new cars at a local dealership. She receives a 25% commission on the profit each car is sold for. Last month she sold 9 cars, for a total of $8,870 dealer profit. How much did she earn in commission? Total Profit on cars: Commission: Why did they tell us 9 cars were sold? 0.25 $8,870 $8,870 x 0.25 = $2,217.50

24. 4) Liz works at Heedle’s Computer Outlet. She receives a weekly salary of $200 plus 3% commission on her sales. Last week, she sold $29,700 of computer equipment. How much did Liz earn last week? Liz’s Earnings = Commission + Commission: Liz’s Earnings: 0.03 $200 $29,700 x 0.03 = $891 $891 + 200 = $1,091

25. 5) Oscar sells Internet access subscriptions by telephone. He receives 12% of the first $1,000 and 15% on the balance over $1,000. Last month he sold $7,500 worth of Internet access subscriptions. What was his commission for last month. First $1,000: Over $1,000 Total Earnings: 0.12 0.15 $1,000 x 0.12 = $120 $6,500 x 0.15 = $975 $6,500 $120 + 975 = $1,095

26. Professional baseball player Rusty Raspberry earns $1,715,000 a year playing baseball. Last year, a biography that he had written sold 300,000 copies at a price of $24 each. Raspberry received 10% in royalties on book sales. What was his total salary last year from the book and his baseball career? Baseball Career: Book Sales: Royalty: Total Salary: 0.10 = $1,715,000 $24 x 300,000 = $7,200,000 7,200,000 x 0.10 = $720,000 $1,715,000 + $720,000 = $2,435,000

27. 7) Maram is a real estate agent. She earns 6.5% commission on each sale she makes. Last month she sold one house for $250,000 and another for $310,000. What did Maram earn in commissions for the month? Total Amount in Sales: Commission: 0.065 $250,000 + $310,000 = $560,000 $560,000 x 0.065 = $36,400

28. 8) Glen has a job selling magazine subscriptions by phone. He makes a base salary of $9.60 per hour plus a 5% commission on all sales. Last week, Glen worked 35 hours and sold $230 worth of subscriptions. What was his gross pay? Base Salary: Base Pay: Commission: Total Pay: 0.05 $9.60 per hour Glen worked 35 hours $9.60 x 35 = $336 $230 x 0.05 = $11.50 $336 + $11.50 = $347.50

29. 9) Hillside Travel pays its employees $10 per hour plus 8% commission on all trips booked. Tyrus worked 20 hours last week and booked trips amounting to $2,100. What was his gross pay for the week? Base Salary: Base Pay: Commission: Total Pay: 0.08 $10 per hour Glen worked 20 hours $10 x 20 = $200 $2,100 x 0.08 = $168 $200 + $168 = $368.00

30. 10) Silvan picks berries at Seymour’s Berry Farm. He receives 28 cents for each small basket picked. Last weekend, he was able to pick 731 baskets. How much did he earn? Piecewise Pay Plan Silvan gets 28 cents per basket He picks 731 baskets $20,468 $204.68 731 * 28 = 20,468

31. Piecework Pay • Steve works in a dress factory. He is paid $85 per dress that is produced. Yesterday, he made 3 dresses. How much did he earn? Earnings = ($ paid per unit) (# of units) = ($85) x (3) = $225 Steve made $225 yesterday.

32. Piecework Pay • Tony picks strawberries and gets paid 45 cents per container for the first 200 containers. He receives 65 cents per container for all containers over 200. Last week, he picked 270 containers. How much did he earn? 1) First 200 containers: → (200) x (0.45) = 90 2) Containers over 200: → (70) x (0.65) = 45.5 Total Sales: = 90 + 45.5 = 135.5 = $135.50 = $90 = $45.50

33. Example 1 Adrianna wrote a textbook for high school students. She receives a 10% royalty based on the total sales of the book. The book sells for $47.95, and 17,000 copies were sold last year. How much did Adrianna receive in royalty payments for last year? Total Sales: Total Earnings: = $815,150 47.95 x 17,000 ($815,150) x (0.10) = $8,515

34. CHECK YOUR UNDERSTANDING Xander writes math textbooks that sell for x dollars each. He received a bonus of $2,500 for signing a contract, and he receives 8% commission on each book sale. Express the total amount of income Xander earns from selling y books algebraically. Total Sales: Commission Earnings: Total Income: ($x per book) (y books sold) = xy (0.08) (xy) = 0.08xy 0.08xy + 2,500

35. Example 2 Allison sells cosmetics part-time from door-to-door. She is paid a monthly commission. She receives 11% of her first $900 in sales and 17% of the balance of her sales. Last month she sold $1,250 worth of cosmetics. How much commission did she earn last month? First $900: Greater than $900: Total Commission: (900) (0.11) = $99 (350) (0.17) = $59.5 = $158.50 $99 + $59.50

36. CHECK YOUR UNDERSTANDING Arthur sells electronics on commission. He receives 7% of his first x dollars in sales and 10% of the balance of his sales. Last week he sold y dollars worth of electronics. Express the commission he earned last month algebraically. First x dollars: Greater than x dollars: Total Commission: (x dollars) (0.07) = 0.07x (y - x dollars) (0.10) =0.1(y-x) = 0.07x + 0.1(y-x)

37. EXAMPLE 3 Kate works in a dress factory that makes dresses for designer boutiques. She is paid a piecework rate of $85 per unit (piece) produced. Yesterday she made 3 dresses. How much did she earn? Piecework Pay: Price made per unit: Units Made: Total Earnings: $85 3 $255 $85 x 3 =

38. CHECK YOUR UNDERSTANDING Martin writes magazine articles. He is paid a rate of p dollars for each article he writes. Last year he wrote s articles. Express his total piecework earnings algebraically. Piecework Pay: Price made per unit: Units Made: Total Earnings: $p s $ps ($p)( s )=

39. EXAMPLE 4 Tony picks strawberries and gets paid at a piecework rate of 45 cents per container for the first 200 containers picked. He receives 65 cents per container for every container over 200 that he picks. Last week, Tony picked 270 containers. How much did he earn? First 200 Strawberries: Last 70 Strawberries: Total Amount Paid: $0.45 x 200 = $90 $0.65 x 70 = $45.50 $90 + $45.50 = $135.50

40. CHECK YOUR UNDERSTANDING Brianna picks tomatoes on a local farm. She receives 11 cents per crate. Last week, her total piecework earnings was x dollars. Express the number of crates she picked algebraically. First 200 Strawberries: Last 70 Strawberries: Total Amount Paid:

41. EXAMPLE 6 Joyce works at Fortunato’s Furniture. She is paid on commission. She receives 10% of her first $900 in sales and 15% of the balance of her sales. Last week she earned $750. What was the total value of the furniture she sold?

42. CHECK YOUR UNDERSTANDING Lauren is a salesperson at Koslow’s Tires. She is paid a monthly commission. She receives 6% of her first $1,000 in sales and 11% of the balance of her sales. Today she earned $203. What was the total value of the tires she sold?