Computation Method 1 (Each Period) - Multiple Breakpoints

The system uses multiple calculations for each breakpoint amount and corresponding percentage using the steps:

1. The system multiplies the period sales amount by 12.

2. The system applies the growth pattern and compares the result with the breakpoint amounts to determine which breakpoint to use.

3. The system subtracts the appropriate breakpoint amount from the calculation.

4. The system multiplies the result of step 3 by the corresponding breakpoint percentage.

5. The system divides the result by 12.

After the system calculates the amount for the highest breakpoint amount, it uses the formula to process the remaining amounts for each breakpoint: [(difference between breakpoint amounts) × (corresponding breakpoint percentage)] ÷ 12

Then, the system adds the sum of the sales overage amounts for each breakpoint and subtracts the recapture amount (if specified) to derive the gross billing amount.

Using the setup information for multiple breakpoints, the system derives the gross billing amount for period 01: {[(15,000 × 12) + 1,000 – 40,000] ×.03} ÷ 12 = 352.50

Because 180,000 (15,000 × 12) is greater than 40,000 (the third breakpoint), the system uses the corresponding breakpoint percentage for amounts over 40,000.

[(40,000 − 20,000) × 0.04] ÷ 12 = 66.67[(20,000 – 500) × 0.05] ÷ 12 = 81.25352.50 + 66.67 + 81.25 − 100 (recapture) = 400.42 (gross billing amount)

Using the same methodology for periods 02 and 03, the system derives the sales overage (gross billing) amounts:

• Period 01: 400.42

• Period 02: 550.42

• Period 03: 700.42