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Looking for reverse commission calculation

  1. #1
    Valued Forum Contributor PeteABC123's Avatar
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    Looking for reverse commission calculation

    Maybe someone here can help"

    Looking for gross margin percentage if you know the following:
    Sales volume is $7.5M
    Sales rep is paid 1/2 of 1% of the gross margin
    Commission paid is $8,000

    Question is: What is the gross margin percentage?
    TIA for your help.

    Pete

  2. #2
    Forum Moderator alansidman's Avatar
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    Re: Looking for reverse commission calculation

    Gross Margin is defined as Sales less Cost of Sales. Based upon your information, gross margin would be $8000/.005 or 1,600,000. GM% is Gross Margin divided by Sales or 21.33%. Been a few years since my accounting days, but I think I got this right.
    Alan


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    Forum Moderator 6StringJazzer's Avatar
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    Re: Looking for reverse commission calculation

    I agree with Alan's calculation.

    If you know that

    commission = 0.5% x gross margin

    then you also know that

    commission / 0.5% = gross margin

    and so the gross margin % is

    (commission / 0.5%) / sales volume
    Jeff
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  4. #4
    Valued Forum Contributor PeteABC123's Avatar
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    Re: Looking for reverse commission calculation

    Thank you all so much, I know that it wasn't entirely Excel related, but after staring at this for a while, my mind started to look like a pretzel; I thought I should turn to the Pros from Dover.

    I appreciate the heavy lifting.

    Pete

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    Forum Moderator 6StringJazzer's Avatar
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    Re: Looking for reverse commission calculation

    Quote Originally Posted by PeteABC123 View Post
    I thought I should turn to the Pros from Dover.
    https://www.youtube.com/watch?v=KojghwX_9eM

  6. #6
    Valued Forum Contributor PeteABC123's Avatar
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    Re: Looking for reverse commission calculation

    Ha!

  7. #7
    Forum Moderator alansidman's Avatar
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    Re: Looking for reverse commission calculation

    So Jeff -- are you Hawkeye?

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