Looking for reverse commission calculation

**PeteABC123** · 04-09-2019, 02:25 PM

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

**alansidman** · 04-09-2019, 02:44 PM

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.

**6StringJazzer** · 04-09-2019, 02:56 PM

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

**PeteABC123** · 04-09-2019, 03:31 PM

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