Commission
is a percentage paid for buying or selling real estate, goods, etc. A consignment is a quantity of goods, sent to an agent, broker or commission merchant, for sale. The consignor is the one who sends the goods, the consignee the one to whom they are sent.
Principles:
1. The commission is some number or per cent of the price of what is bought or sold.
2. The proceeds equal the selling price minus the commission.
3. The amount equals the selling price plus the commission.
Commission presents two classes of problems. One of these classes may be called “buying problems.” The other may be called “selling problems.”
Buying Problem: I sent my agent $1977.60 to buy wild farm lands in northern Wisconsin, at $3 per acre. He was to receive 3% for his work. How many acres did he buy?
Work and Explanation:
3% of $3 = $.09.
Cost to me of 1 acre is $3 +.09 = $3.09
For $1977.60 he buys as many acres as $3.09 is contained times in $1977.60, or 640. Hence, he buys 640 acres.
Selling Problem: My agent sells 360 pounds of butter for me at 20 cents. He pays $4.20 freight charges and $9.60 for storage. His commission is 5%. What does he send me?
Work and Explanation:
| 360 pounds at 20 cents = | $72.00 | |
| Freight is | $4.20 | |
| Storage is | 9.60 | |
| Commission is 5% of $72, or | 3.60 | |
| Total charges = | 17.40 | |
| He sends me the difference, or | $54.60 | |