Tax/Tip/Discount/MarkUp/Commission Flashcard

Front

What is commission?

Back

Commission is a fee paid to an employee or agent for services rendered, typically calculated as a percentage of the sales made.

Front

How do you calculate commission?

Back

To calculate commission, multiply the total sales amount by the commission rate (as a decimal). For example, if the commission rate is 12% and sales are $22,540, the commission is $22,540 x 0.12 = $2,704.80.

Front

What is sales tax?

Back

Sales tax is a tax imposed by the government on the sale of goods and services, usually calculated as a percentage of the purchase price.

Front

How do you calculate sales tax?

Back

To calculate sales tax, multiply the cost of the item by the sales tax rate (as a decimal). For example, for an item costing $77 with a 9.8% tax rate, the tax is $77 x 0.098 = $7.55.

Front

What is markup?

Back

Markup is the amount added to the cost price of goods to cover overhead and profit, usually expressed as a percentage of the cost.

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How do you calculate the selling price with markup?

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To calculate the selling price with markup, multiply the cost by the markup percentage (as a decimal) and add it to the cost. For example, if a soda costs $1.25 with a 20% markup, the selling price is $1.25 + ($1.25 x 0.20) = $1.50.

Front

What is a discount?

Back

A discount is a reduction in the price of a product or service, often expressed as a percentage of the original price.

Front

How do you calculate the final price after a discount?

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To calculate the final price after a discount, subtract the discount amount from the original price. For example, if an item costs $100 with a 20% discount, the discount is $100 x 0.20 = $20, so the final price is $100 - $20 = $80.

Front

What is the difference between commission and salary?

Back

Commission is based on sales performance, while salary is a fixed regular payment regardless of sales.

Front

What is the formula for calculating total cost including tax?

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Total cost including tax = Original price + (Original price x Sales tax rate). For example, for an item costing $77 with a 9.8% tax, total cost = $77 + ($77 x 0.098) = $84.55.