Section 1-7 Graduated Commission
After reading through the beginning paragraph on page 106 of the textbook, move to Example 1's chart. Examining this chart will simplify the explanation of a graduated commission. Note that the same information from the chart is included in the second and third columns of the chart below. The first column shows the separate levels of sales earned by Irene, along with the calculations. The chart below contains the same information as in the textbook explanation, but placed into chart form. The key is to separate the amounts into the different levels of commission and multiply. The last step is to add all of the amounts of the computed levels together to find the total graduated commission.
| Sales Separated into Levels | Commission Percent | Level of Sales |
| First $1,000×4%=$40.00 | 4% | First $1,000 |
| Next $2,000×6%=$120.00 | 6% | Next $2,000 |
| Amount over $3,000=( $9,840−$3,000 )=$6,840 $6,840×8%=$547.20 |
8% | Over $3,000 |
| Total Graduated Commission = $707.20 |
CALCULATING GRADUATED COMMISSION
Calculating graduated commission is a great opportunity to use the memory functions on your calculator to make the process easier.
For the above example, follow these steps in using your calculator:
1,000 X 4 % = M+ 2,000 X 6 % = M+ 9,840 – 3,000 = X 8 % = M+ M*