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It's not typical in any industry that pays commission. To be clear, there is a different between gross profit and gross sales. Either way, paying commission on either is not the standard.
Gross profit and gross sales implies a number beforing taking out sales taxes that a company must pay.
Typically, commission is paid on net profit or net sales because the "sales person" because the company has to pay the taxes and the sales person had no bearing on these taxes.
Look at it this way. When tipping (which is really like paying commission) a waiter/waitress, you should tip on the amount before taxes are added not after. Taxes are a product of the state laws, etc, not the business charging the taxes. The waiter has noting to do with something the state charges.
Wiki User
∙ 11y ago
Wiki User
∙ 9y agoCommission is paid on sales basis and not on profit basis but if it is written in agreement that commission will be on profit basis then it can be paid on profit basis otherwise it is on sales basis.
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What called The difference between net sales and cost of goods sold divided by net sales?
1. Net sales - cost of goods sold = Gross profit Gross profit / Net sales = Gross profit ratio
Net sales minus cost of goods sold?
Net sales - CoGS = Gross Profit Gross Profit - other expenses = Net profit before tax Net profit before tax - tax amount = Net profit after tax
What does gross and net mean?
Gross means 'before', net means 'after'. Gross profit = sales - cost of sales Net profit = sales - cost of sales - overheads (e.g. telephone, electricity) So gross profit is before deductions, whereas net profit is after all the deductions.
Formula for net profit ratio?
Net Profit Margin = Net Profit/ Sales Revenue X 100
What will be your net profit of for example you have sales of 42980 and cost of sales of 14620 and expenses of 15390?
Sales = 42980 Cost of sales = 14620 Gross profit = 28360 Expenses = 15390 Net profit = 12970
How do you Calculate Net Profit Margin?
Net profit margin is calculated as net income divided by sales.
What is the difference between gross margin and net profit?
Gross Margin = (Gross Profit/Sales)*100 Gross Profit = Revenue - Cost of Sales Net Profit = Revenue - Expenses Or in words, the Gross Margin is an expression of the Gross Profit as a percentage of Sales, where the Gross Profit is Sales minus the Cost of Sales. The Net Profit, on the other hand, is Revenue minus ALL Expenses (including cost of sales).
What is the Difference between Gross profit Net profit?
Gross Profit = Sales - Cost of Sales and Direct cost Net Profit = G.P - Indirect Expenses By Cyril Joseph
If net profit after tax is 64000 and sales is 720000 what is the net profit margin?
Net profit margin = 64000 / 720000 * 100 Net profit margin = 8.89%
How do you calculate profit margin ratio?
net profit/sales
Formula for calculating net profit?
Sales Less: Cost of sales Gross Profit Less: Admin Expenses Selling Expenses Other Expenses Net Profit
Is cost of sales or turnover the same as net sales?
Cost of sales is the expenses to earn sales so cost of sales and net sales are not same, formula for gross profit is as follows: Gross profit = Sales - Cost of sales
