commercial commission calculation | 9 Exercises

Application: Immofacile Real Estate Agency

States :

The Immofacile real estate agency pays its sales agents a percentage commission on the sales they make. Each property sold earns the agent a commission calculated on the net seller amount. For the month of September, an agent of the agency sold three properties, respectively for €150, €000, and €200, with a commission rate of 000% on the net seller amount.

Work to do :

1. Calculate the total commission the agent gets for the month of September.
2. If the agent wants to increase his revenue by 10% for the following month, what total net seller amount must he achieve to achieve this goal, assuming the commission rate remains unchanged?
3. A new regulation requires adding 20% ​​VAT to the commission rate. What will be the total commission amount, including VAT, received by the agent on September sales?
4. If the agent sells an additional property for €180, how will this impact his income as a percentage compared to the previous month, without taking into account VAT?
5. Suppose that a bonus of €500 is awarded to the agent for each sale over €200. Calculate the total amount received by the agent for the month of September if this bonus is applied.

Proposed correction:

1. The total commission for the month of September is calculated by adding the individual commissions for each sale.
   Total commission = (€150 + €000 + €200) x 000%
   = €600 x 000
   = €24.
   The agent receives a total commission of €24 for the month of September.

2. To increase his income by 10%, the agent must obtain:
   Desired income = €24 x 000
   = €26.
   Desired net seller income = €26 ÷ 400
   = €660.
   The agent must achieve sales for a total net seller amount of €660.

3. The new commission, including 20% ​​VAT, is calculated as follows:

VAT commission included = €24 x 000
= €28.
The agent will receive a total of €28 after VAT is applied.

4. Addition of the additional sale at €180:
   New commission = €24 + (€000 x 180)
   = €24 + €000
   = €31.
   Percentage increase = ((€31 – €200) ÷ €24) x 000
   = 30%.
   The agent sees his income increase by 30%.

5. The total amount with the bonus included:
   Total bonuses = 2 x €500
   = €1.
   Total received = €24 + €000
   = €25.
   The agent receives a total of €25 after the bonus is applied.

Formulas Used:

Title	Formulas
Total Commission	(Sale 1 + Sale 2 + Sale 3) x Commission Rate
Desired net seller income	Desired Income ÷ Commission Rate
VAT commission included	Total commission x (1 + VAT rate)
Percent increase	((New Commission – Old Commission) ÷ Old Commission) x 100
Total received with bonus	Total Commission + Total Bonuses

Application: High-Tech Solutions Company

States :

High-Tech Solutions offers a range of innovative electronic products. Each salesperson benefits from a commission equivalent to a rate of 6% on the turnover excluding tax achieved. During a technology fair, a salesperson concluded several contracts for a total amount excluding tax of €450. In addition to the commission, a bonus of €000 per contract beyond three contracts is awarded.

Work to do :

1. Determine the commission that the salesperson receives on the turnover of €450.
2. Calculate the total bonus if the salesperson signed five contracts.
3. If the VAT rate is 5,5%, what is the amount of the VAT-inclusive commission?
4. What would the additional sales excluding VAT have to be to double the commission initially received?
5. Assess the strategic interest for the company of reviewing the bonus system if the average number of contracts per salesperson increases to ten per month.

Proposed correction:

1. The commission on turnover is calculated as follows:
   Commission = €450 x 000%
   = €27.
   The salesperson receives a commission of €27.

2. The full bonus includes two additional contracts:
   Total bonus = 2 x €300
   = 600 €.
   The salesperson receives a bonus of €600.

3. The amount of the commission including tax is calculated as follows:

Commission including tax = €27 x (000 + 1)
= €27 x 000
= €28.
The commission including tax is €28.

4. To double the initial commission of €27, the target is €000.
   Additional sales = (€54 – €000) ÷ 27
   = €450.
   It is necessary to achieve €450 in additional sales excluding tax.

5. Increasing to ten contracts per month could reduce the company's profitability due to excessive bonuses. Reevaluate the bonus strategy to better align the interests of the salesperson and the company while preserving profitability.

Formulas Used:

Title	Formulas
Commission	Net turnover x Commission rate
Total bonus	(Number of additional contracts) x Bonus amount
Commission including VAT	Commission excluding VAT x (1 + VAT rate)
Additional sales required	(Desired Commission – Initial Commission) ÷ Commission Rate
Strategic assessment	Qualitative analysis of the financial impacts of bonuses

Application: Innovative Learning Start-up

States :

The start-up Innovative Learning, specializing in online training, is recruiting independent salespeople. They receive a 12% commission on each registration at a rate of €200 excluding VAT. One salesperson managed to get 50 students registered during a promotional campaign.

Work to do :

1. Calculate the total commission for the salesperson on the 50 registrations.
2. What would be the salesperson's net income if a 3% business tax is levied on the commission?
3. If the registration fee excluding VAT increases to €250, while maintaining the same commission rate, what would be the new commission for 50 registrations?
4. How many registrations must be increased for the salesperson to earn a commission of €15 at the new rate?
5. Explain the advantages and disadvantages for the start-up of increasing the registration fee.

Proposed correction:

1. The total commission is calculated by:
   Total commission = Number of registrations x Price excluding tax x Commission rate
   = 50 x 200 € x 12%
   = €1.
   The salesperson earns €1 in commissions.

2. Net income after business tax:
   Tax = Total Commission x 3%
   = €1 x 200
   = 36 €.
   Net income = €1 – €200
   = €1.
   The salesperson's net income is €1.

3. The increased rate to €250 changes the commission as follows:

New commission = 50 x €250 x 12%
= €1.
The new commission is €1 for 500 registrations.

4. With a rate of €250, the target commission of €15 requires:
   Number of registrations = €15 ÷ (€000 x 250)
   = 500.
   500 registrations are needed to reach €15 in commissions.

5. Raising the fee may increase revenue and profitability. However, it could also reduce course accessibility, potentially decreasing enrollment.

Formulas Used:

Title	Formulas
Total Commission	Number of registrations x Price excluding VAT x Commission rate
Net income after tax	Total Commission – (Total Commission x Tax Rate)
New commission with increased rate	Number of registrations x New price excluding VAT x Commission rate
Number of registrations for target	Commission target ÷ (New rate excluding VAT x Commission rate)
Assessment of the tariff increase	Analysis of financial and commercial impacts

Application: EcoTravel Tourism Company

States :

EcoTravel, an eco-friendly travel company, offers its representatives progressive commissions on travel sales. The commission rate is 5% for sales up to €20, and 000% above. One agent made €8 in total sales in the last month.

Work to do :

1. Determine the agent's total commission by applying the different rate bands.
2. What is the impact of a rate change to 10% for sales over €20 on the overall commission?
3. If the agent also receives a 2% bonus on all sales, what is the total revenue?
4. Calculate the difference in income if the VAT rate applicable to the commission is 20%.
5. Analyze the effectiveness of the progressive commission strategy to motivate representatives to increase their sales beyond €20.

Proposed correction:

1. The total commission is calculated using the two different rates:
   Commission below €20
   = €20 x 000%
   = €1.
   Commission above €20
   = (€35 – €000) x 20%
   = €15 x 000%
   = €1.
   Total Commission
   = €1 + €000
   = €2.
   The agent receives a total commission of €2.

2. With a rate adjusted to 10%, the commission is:
   New commission
   = €20 x 000% + €5 x 15%
   = €1 + €000
   = €2.
   The agent would get a commission of €2, an additional increase of €500.

3. The 2% bonus on sales results in additional income:

Gratification
= €35 x 000%
= 700 €.
Total revenue
= €2 + €200
= €2.
The total income including the bonus is €2.

4. If VAT is applied at 20%, the difference would be:
   VAT on commission
   = €2 x 200%
   = 440 €.
   Final income with VAT
   = €2 – €200
   = €1.
   VAT reduces net income to €1, reducing the agent's profit.

5. Progressive compensation is driving sales at EcoTravel, encouraging agents to exceed €20 for higher commission, although the impact on motivation needs to be monitored with the addition of external costs such as VAT.

Formulas Used:

Title	Formulas
Commission up to €20	Amount x Commission rate for ? 20 €
Commission over €20	(Total sales – €20) x Progressive commission rate
Total income with additional bonus	Total Commission + (Total Sales x Bonus Rate)
Difference after VAT	Total Commission – (Total Commission x VAT Rate)
Evaluation of strategic effectiveness	Analysis of motivation effects and new cost structures

Application: BookPulse Online Bookstore

States :

Online bookstore BookPulse pays its affiliate partners a 10% commission on each book sold. Last quarter, one affiliate managed to sell €15 worth of books excluding VAT. In addition, a 000% bonus is awarded on sales volume exceeding the €5 threshold.

Work to do :

1. Calculate the total affiliate commission amount for quarterly sales.
2. Estimate the additional income thanks to the bonus on sales exceeding €10.
3. What would be the commission amount with 5,5% VAT included on all sales?
4. How much more does the affiliate need to sell to bring his income (commission + bonus) to €2 in total?
5. Analyze the implications of increasing the bonus to 8% on sales above €12 for BookPulse in terms of profitability.

Proposed correction:

1. The total affiliate commission is:
   Commission = €15 x 000%
   = €1.
   The affiliate receives a total commission of €1.

2. The bonus, calculated on the excess of €10, is:
   Bonus = (€15 – €000) x 10%
   = €5 x 000%
   = 250 €.
   The additional income from the bonus is €250.

3. The amount of the commission with VAT of 5,5% is:

Commission with VAT = (€1 + €500) x (250 + 1)
= €1 x 750
= €1.
The commission including tax is €1.

4. The target income of €2 requires:
   Additional income required = €2 – (€500 + €1)
   = 750 €.
   Additional sales required = €750 ÷ 0,15
   = €5.
   The affiliate must sell an additional €5 to reach this goal.

5. Increasing the premium to 8% for sales above €12 may decrease BookPulse's net margin if average monthly sales do not offset the increased premium costs, requiring a careful cost-benefit analysis.

Formulas Used:

Title	Formulas
Total Commission	Sales excluding VAT x Commission rate
Bonus on excess sales	(Excl. VAT Sales – Threshold) x Premium Rate
Commission with VAT	(Commission + Bonus) x (1 + VAT rate)
Additional sales for target	Additional Income Required ÷ (Commission Rate + Bonus Rate)
Impact analysis of bonuses	Detailed analysis of margins and cost structure

Application: FloraMagazine Subscription Service

States :

FloraMagazine, a press company specializing in organic gardening, employs agents who receive a 7% commission on each subscription sold at a price of €60 excluding VAT per unit. In addition, a loyalty bonus of €200 is granted for every 100 subscriptions over and above the 100th.

Work to do :

1. Determine the commission received for 120 subscriptions sold.
2. Calculate the total bonus for sales made this month.
3. If an agent sells 55 additional subscriptions, what would be his income (commission + bonus) this month?
4. What should the subscription price be excluding VAT so that the commission reaches €500 with only the first 120 sales?
5. Evaluate the long-term benefits to FloraMagazine of introducing a variable loyalty bonus based on the seasonality of sales.

Proposed correction:

1. The total commission for 120 subscriptions is:
   Commission = 120 x €60 x 7%
   = 504 €.
   The agent receives a commission of €504 on 120 subscriptions.

2. The bonus for additional sales of 20 subscriptions is:
   Bonus = €200.
   The total bonus is €200 for these sales.

3. For 175 subscriptions (120 + 55):

Additional commission = 55 x 60 € x 7%
= 231 €.
Total bonuses for 175 subscriptions = €200 + €200
= 400 €.
Total income = €504 + €231 + €400
= €1.
The agent has a total income of €1.

4. For a commission of €500, calculated only with the first 120 sales:
   500 € = 120 x Price excluding VAT x 7%
   Price excluding VAT = €500 ÷ (120 x 0,07)
   = 59,52 €.
   The price excluding VAT should be readjusted to €59,52.

5. A flexible, seasonally-based bonus would further motivate agents during low sales periods and align with market seasonality, improving the magazine's financial stability and agent engagement.

Formulas Used:

Title	Formulas
Total commission for subscriptions	Number of subscriptions x Price excluding VAT x Commission rate
Total premium	(Total number of subscriptions – 100) ÷ 100 x Premium amount
Total revenue	Total Commission + Additional Commission + Total Bonus
Readjustment of the price excluding VAT	Target Commission ÷ (Number of Sales x Commission Rate)
Evaluation of a variable bonus	Analysis of seasonal fluctuations and program attractiveness

Application: CloudSys Software Company

States :

CloudSys, a SaaS software provider, pays its representatives an 8% commission on the net value of each subscription contract, which costs €1 net. This month, a representative sold 200 subscriptions and a 35% bonus on the surplus after 5 sales is planned.

Work to do :

1. Calculate the commission the rep earns on this month's sales.
2. Determine the bonus received on sales exceeding the threshold of 30 subscriptions.
3. What is the representative's total income, including commission and bonus?
4. If CloudSys increases the subscription cost to €1 excluding VAT, how will this affect the commission of 400 sales?
5. Analyze the strategic implications for the business of adopting additional incentives based on subscriber retention.

Proposed correction:

1. The total commission is:
   Commission = 35 x €1 x 200%
   = €3.
   The representative receives a commission of €3.

2. The bonus for 5 additional subscriptions is:
   Bonus = 5 x €1 x 200%
   = 300 €.
   The representative receives an additional bonus of €300.

3. The representative's total income is:

Total income = €3 + €360
= €3.
The total income including the bonus is €3.

4. If the subscription cost increases:
   New commission = 35 x €1 x 400%
   = €3.
   The commission increases to €3, an increase of €920 compared to the initial cost.

5. By adopting loyalty incentives, CloudSys can ensure a steady cash flow and this could strengthen customer relationships, but it will require careful management of resources so that spending on incentives does not compromise profitability.

Formulas Used:

Title	Formulas
Total Commission	Number of subscriptions x Cost excluding VAT x Commission rate
Bonus	(Number of additional sales) x Cost excluding tax x Bonus rate
Total revenue	Total Commission + Bonus
New commission with adjusted cost	Number of subscriptions x New cost excluding tax x Commission rate
Analysis of loyalty incentives	Qualitative assessment of financial and customer impacts

Application: Restaurant FoodArt

States :

FoodArt Restaurant offers an incentive program for venue managers. They receive a 4% commission on the turnover excluding tax generated by private events. This month, the manager hosted five events generating a total of €30 excluding tax. In addition, a one-off bonus of €000 is given if the turnover exceeds €500.

Work to do :

1. Calculate the commission received by the room manager for this month.
2. What is the manager's total income, including commission and exceptional bonus?
3. If each event generated 10% more revenue, what would the new commission be?
4. Explore the benefits that FoodArt could gain by maintaining such incentives for managers.
5. Propose another form of financial reward that could encourage loyalty and performance of room managers, and justify your choice.

Proposed correction:

1. The total commission is:
   Commission = €30 x 000%
   = €1.
   The room manager receives a commission of €1.

2. The total income, including the exceptional bonus, is:
   Total income = €1 + €200
   = €1.
   Total income this month is €1.

3. With a 10% increase in turnover:

New turnover = €30 x 000
= €33.
New commission = €33 x 000%
= €1.
The new commission would be €1.

4. Incentives ensure high motivation for managers, which results in better customer satisfaction and a potential increase in turnover at events. This can improve reputation and build greater customer loyalty.

5. A reward such as an annual bonus based on customer satisfaction or reaching revenue targets could be a great incentive. This would motivate managers to invest not only in increasing revenue, but also in the overall customer experience, a strategic criterion for FoodArt.

Formulas Used:

Title	Formulas
Total Commission	Net turnover x Commission rate
Total revenue	Commission + Exceptional bonus
New commission with increase	New turnover x Commission rate
Analysis of the benefits of an incentive program	Assessment of impacts on motivation and financial results
Proposal of an alternative reward	Qualitative analysis of the impact of customer experience and financial results

Application: DecoPlus Interior Design Company

States :

DecoPlus, a specialist in interior design, offers its salespeople a 9% commission on completed projects. This quarter, a salesperson completed four projects worth €80, €000, €95, and €000. A 110% bonus is added for any quarterly turnover exceeding €000.

Work to do :

1. Calculate the total commission for the salesperson for this quarter.
2. Evaluate whether the salesperson will benefit from the additional bonus this quarter.
3. What is the total income, including commission and bonus?
4. If two additional projects are completed at €105 and €000, how would the new commission and bonus be affected?
5. Develop a strategy that can incentivize salespeople to exceed their regular targets with attractive offers.

Proposed correction:

1. The total commission is:
   Commission = (€80 + €000 + €95 + €000) x 110%
   = €3.
   The total commission is therefore €36.

2. Total turnover = €80 + €000 + €95 + €000
   = €410.
   The additional premium is applied.
   Bonus = €410 x 000%
   = €4.

3. The total income is thus:

Total income = €36 + €090
= €40.
The salesperson receives a total income of €40.

4. With two additional projects:
   New turnover
   = €410 + €000 + €105
   = €650.
   New commission
   = €650 x 000%
   = €58.
   New bonus
   = €650 x 000%
   = €6.

   Total revenue
   = €58 + €500
   = €65.

5. To motivate salespeople, DecoPlus could implement a tiered rewards system, offering increased bonuses upon reaching certain quarterly or annual sales thresholds. This could also include exclusive vacations or events, translating the achievement of exceptional performance into rewarding experiences.

Formulas Used:

Title	Formulas
Total Quarterly Commission	? (completed projects x Commission rate)
Additional bonus on turnover	Total turnover exceeding threshold x Premium rate
Total income with bonus	Total Commission + Bonus
New CA and commission with additional projects	Adjusted Total Revenue x Commission Rate
Tiered incentive strategy	Qualitative evaluation of incentive offers and their effects