Commissioned Employee Earnings Calculation

How are the total earnings of a commissioned employee calculated?

A) By adding the commission rate to the total sales

B) By subtracting the commission rate from the total sales

C) By dividing the commission rate by the total sales

D) By multiplying the commission rate with the total sales

Answer:

D) By multiplying the commission rate with the total sales

The total earnings of a commissioned employee are calculated by multiplying the commission rate with the total sales. This calculation is done by taking the percentage commission rate (expressed as a decimal) and multiplying it by the total amount of sales the employee has made.

For example, if a commissioned employee earns a 9.5% commission rate and they generate $1,000 in sales, their earnings would be calculated as $1,000 * 0.095, which equals $95.00.

It is important for businesses to accurately calculate the total earnings of their commissioned employees to ensure fair compensation based on their sales performance.