Commission and Other Income II
We all like earning money but did you know that people earn money in different ways? Some people earn salaries, some people (usually people in sales jobs like real estate agents) receive commissions and others receive wages. It's important to understand how you get paid to make sure you're earning a fair amount and not getting ripped off!
So to help us understand these different types of earnings, let's start with a couple of definitions:
Income: money that is received or earned.
Wage: money paid by an employer to an employee. It is usually calculated as an hourly rate or based on the quantity of work done.
Salary: A salary is a fixed income that is based on a fixed number of working hours. An employee may be receive a weekly, fortnightly or monthly salary. The employee will receive the same amount of income each time period, regardless of whether they work more or less hours, as it is thought this will be averaged out.
Commission: an amount an agent or salesperson receives as a percentage of the sale. e.g. If Katherine receives a $10%$10% commission on a $\$150$$150 sale, she would earn $\$15$$15 since $\$15$$15 is $10%$10% of $\$150$$150.
Piecemeal: a person with a piecemeal wage earns money based on the number of items a person makes. e.g. A person receives $\$2$$2 for each item they make, so if they made $50$50 items, they would receive $\$100$$100 and if they made $100$100 items, they would receive $\$200$$200.
The way someone earns money will determine how we calculate how much they earn in a given time period. However, we don't always want to work out the total amount a person receives. Sometimes we may be asked to calculate how many hours a person has worked, how many items they have produced or what percentage commission they receive. We use the same processes like we learned earlier, however we just change our equations depending on what variable in unknown.
Read through the examples below to see some examples of commissions and other types of wages.
Examples
Question 1
A process worker earns $\$3$$3 for each article assembled. Calculate the number of articles he has to assemble to earn $\$240$$240.
Think: Let's let the number of articles he has to assemble be $n$n to write an expression for this question.
Do:
| $3n$3n | $=$= | $240$240 |
| $n$n | $=$= | $240\div3$240÷3 |
| $n$n | $=$= | $80$80 |
He has to assemble $80$80 items.
Question 2
A delivery driver earns $\$9$$9 per item up to eight items, then $\$19$$19 per item delivered thereafter. Calculate the income earned for delivering:
A) $4$4 items
Think: This number is under eight items, so they will earn $\$9$$9 per item.
Do: $4\times9=\$36$4×9=$36
B) $12$12 items
Think: The driver will get $\$9$$9 for each of the first eight items, then $\$19$$19 for each of the remaining four.
Do:
| $9\times8+19\times4$9×8+19×4 | $=$= | $72+76$72+76 |
| $=$= | $\$148$$148 |
Question 3
A salesperson receives a commission of $\$204$$204. Their sales total was $\$816$$816. What percentage commission were they paid?