Commissions, Royalties, & Piecework
Pay
Section 6-3
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

Commission
 Some jobs that get paid commission:
a)
Real Estate Agent
b)
Salesmen for department stores
c)
TV – Sales
d)
Any type of sales job
Royalties
 Some jobs that pay royalties
a)
Author
b)
Movie Director
c)
Actor/Actress
d)
Musician
Piecework Pay
 Jobs that have piecework pay plans:
a)
Newspaper delivery
b)
Field workers (pick corn, strawberries, etc)
c)
Factory workers
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?
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:
6%
Convert the percent to a decimal:
0.06
Multiply the decimal by the amount of sales:
0.06 x 38,000 = $2,280
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:
15%
Convert the percent to a decimal:
0.15
Multiply the decimal by the amount of sales:
0.15 x 9,500
= $1,425
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:
0.15 x 2,870 = $430.50
Second Month: 0.15 x 3,150 = $472.50
Third Month: 0.15 x 3,940 = $591
Total Commission: = $1,494
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 = 0.03 x 29,700 = $891
Weekly Salary = = $200
Earnings = = $891 + $200 = $1,091.00
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
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?
(35 )= 5.25
(X)
Multiply
35x = 5.25
x = 0.15
15%
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
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
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
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
Royalties & Piecework Pay
Remember
 Royalties
 You are paid according to sales on an item you
created
 Piecework Pay
 You are paid according to how much you
manufacture
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 = $815,150
(Sellingamount
Price) xof(#
of copies
2) Find=royalty
total
sales sold)
= (10%)
(47.95)x x(total
(17,000)
sales)
=
x (815,150)
= (0.10)
$815,150
= $81,515
Total amount you receive in royalties is $81,515
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 = $1,424,525
2) Find=royalty
total
sales sold)
(Sellingamount
Price) xof(#
of copies
=
x (total
sales)
= (5%)
(29.99)
x (47,500)
= (0.05) x (1,424,525)
= $1,424,525
= $71,226.25
Total amount you receive in royalties is $71,226.25
Classwork
In book, please complete
problems 2-10 on page
307
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? 1,000,000 x $5
= $5,000,000
What was the total amount of video sales? 550,000 x $6
= $3,300,000
What was the combined total? = 5,000,000 + 3,300,000
= $8,300,000
How much did Donny receive in royalties? $8,300,000 x 0.15
= $1,245,000
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?
0.25
Total Profit on cars: $8,870
Commission: $8,870 x 0.25 = $2,217.50
Why did they tell us 9 cars were sold?
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?
0.03
Liz’s Earnings = Commission + $200
Commission: $29,700 x 0.03 = $891
Liz’s Earnings: $891 + 200 = $1,091
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.
0.12
0.15
First $1,000: $1,000 x 0.12 = $120
Over $1,000 $6,500 x 0.15 = $975
Total Earnings: $120 + 975 = $1,095
$6,500
6)
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: = $1,715,000
0.10
Book Sales: $24 x 300,000 = $7,200,000
Royalty: 7,200,000 x 0.10 = $720,000
Total Salary: $1,715,000 + $720,000 = $2,435,000
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?
0.065
Total Amount in Sales: $250,000 + $310,000 = $560,000
Commission: $560,000 x 0.065 = $36,400
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?
0.05
Base Salary: $9.60 per hour
Glen worked 35 hours
Base Pay: $9.60 x 35 = $336
Commission: $230 x 0.05 = $11.50
Total Pay: $336 + $11.50 = $347.50
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?
0.08
Base Salary: $10 per hour
Glen worked 20 hours
Base Pay: $10 x 20 = $200
Commission: $2,100 x 0.08 = $168
Total Pay: $200 + $168
= $368.00
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
731 * 28 = 20,468
$20,468
$204.68
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.
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
= $90
2) Containers over 200:
→ (70) x (0.65) = 45.5
= $45.50
Total Sales:
= 90 + 45.5
= 135.5
= $135.50
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: 47.95 x 17,000 = $815,150
Total Earnings: ($815,150) x (0.10) = $8,515
Slide 33
CHECK YOUR UNDERSTANDING
Xander writes math textbooks that sell for x dollars
each. He received a bonus of $2,500 for signing a
contract, and he receives 8% commission on each
book sale. Express the total amount of income Xander
earns from selling y books algebraically.
Total Sales: ($x per book)(y books sold) = xy
Commission Earnings: (0.08)(xy) = 0.08xy
Total Income: 0.08xy + 2,500
Slide 34
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: (900) (0.11) = $99
Greater than $900: (350) (0.17) = $59.5
Total Commission: $99 + $59.50 = $158.50
Slide 35
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: (x dollars) (0.07) = 0.07x
Greater than x dollars: (y - x dollars) (0.10) =0.1(y-x)
Total Commission: = 0.07x + 0.1(y-x)
Slide 36
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: $85
Units Made: 3
Total Earnings: $85 x 3 = $255
Slide 37
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: $p
Units Made: s
Total Earnings: ($p)( s )= $ps
Slide 38
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: $0.45 x 200 = $90
Last 70 Strawberries: $0.65 x 70 = $45.50
Total Amount Paid: $90 + $45.50 = $135.50
Slide 39
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:
Slide 40
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?
Slide 41
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?
Slide 42