1. Advanced Real Estate Forecasting Implementation Guide
  2. Computation Method 2 (Cumulative) - Multiple Breakpoints

Computation Method 2 (Cumulative) - Multiple Breakpoints

When you set up multiple breakpoints, the system uses a separate calculation for each breakpoint amount and corresponding percentage using these steps:

  1. The system applies the growth pattern to the cumulative sales amount for the period and compares the result to the breakpoint amounts to determine which breakpoint to use.

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

  3. The system multiplies the result of step 2 by the corresponding breakpoint percentage.

  4. The system calculates the sales overage amounts for the remaining breakpoints using the formula:

    difference between breakpoint amounts x corresponding breakpoint percentage

  5. The system adds the sales overage amounts for each breakpoint, subtracts the prior gross billings, and subtracts the recapture amount (divided by 12).

Using the setup information for multiple breakpoints, the system calculates the sales overage (gross billing) amount for each period:

Period 01: 675

(15,000 + 1,000 − 500) × 0.05 − 100= 675

The system uses the first breakpoint only (500) because 15,000 is less than 20,000.

Period 02: 840

The system calculates the sales overage amount for the highest breakpoint first, which in this example is the second breakpoint (20,000) because the cumulative sales amount is not greater than 40,000.

(35,000 + 1,000 − 20,000) × 0.04 = 640

The system calculates the sales overage amount for the remaining breakpoint:

(20,000 − 500) × 0.05 = 975

The system sums the sales overage amounts for each breakpoint, subtracts the prior gross billings, and then subtracts the recapture amount to derive the sales overage amount for the period:

640 + 975 − 675 − 100 = 840

Period 03: 790

(60,000 + 1000 − 40,000) × 0.03 = 630

The system uses the third breakpoint (40,000) because 60,000 is greater than 40,000.

The system calculates the sales overage amounts for the other breakpoints as follows:

(40,000 − 20,000) × 0.04 = 800(20,000 − 500) = 0.05 = 975

The system sums the sales overage amounts for each breakpoint, subtracts the prior gross billings, and then subtracts the recapture amount to derive the sales overage amount for the period:

630 + 800 + 975 − 675 − 840 − 100 =790