Computation Method 3 (Cumulative Pro-Rata) - Single Breakpoint

Using a combination of computation methods 1 and 2, the system uses the steps to calculate sales overage for a single breakpoint:

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

2. The system divides the result by the period number.

3. The system applies the growth pattern.

4. The system compares the result from step 3 with the breakpoint, and if it exceeds it, the system subtracts the appropriate breakpoint amount from the calculation.

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

6. The system divides the result by 12.

7. The system multiplies the result of step 6 by the period number.

8. The system subtracts the prior gross billing amounts.

9. The system subtracts the recapture amount (divided by 12).

Using the setup information for a single breakpoint, the system derives the sales overage (gross billing) amounts for each period as follows:

Period 01: {[(15,000 × 12) ÷ 1 + 1,000 ÷ 500] × 0.05} ÷ 12 × 1 − 100 = 652.08

Period 02: {[(35,000 × 12) / 2 + 1,000 – 500] × 0.05} ÷ 12 × 2 − 652.08 − 100 = 1,002.08

Period 03: {[(60,000 × 12) / 3 + 1,000 – 500] × 0.05} ÷ 12 × 3 − 652.08 − 1,002.08 − 100 = 1,252.08