Calculation Method 6 Example
This example shows how the system uses the Lease Pro Rata method to calculate a lease through the first four months of the sales year. Lease 333 has a percentage due of 5 percent, and a total breakpoint of 2,700,000.00 USD, which was set up in the Product Scales Master table (F15014B).
This table lists dollar breakpoint and percent due for each product code:
Product Code |
Dollar Breakpoint |
Percent Due |
|---|---|---|
CLTH |
600,000.00 |
5.00 |
ELEC |
900,000.00 |
5.00 |
SPRT |
1,200,000.00 |
5.00 |
This table lists the sales for January through April, 2007 for each product code:
Product Code |
January |
February |
March |
April |
|---|---|---|---|---|
CLTH |
40,000.00 |
60,000.00 |
90,000.00 |
95,000.00 |
ELEC |
50,000.00 |
65,000.00 |
70,000.00 |
125,000.00 |
SPRT |
150,000.00 |
160,000.00 |
175,000.00 |
180,000.00 |
When you run the Sales Overage Generation (R15120) for January 2007, the following results occur:
Lease breakpoint is 2,700,000.00 USD.
Gross sales are 240,000.00 USD (40,000 + 50,000 + 150,000).
Annualized sales are 2,880,000.00 USD (240,000 × 12).
This table lists the details by product code:
Product Code
Description
Amount One
Amount Two
Percent
Billing Amount
Annualized Amount
CLTH
Sales (Period, Annualize)
40,000
480,000
(40,000 × 12)
NA
NA
NA
ELEC
Sales (Period, Annualize)
50,000
600,000
(50,000 × 12)
NA
NA
NA
SPRT
Sales (Period, Annualize)
150,000
1,800,000
(150000 × 12)
NA
NA
NA
SPRT
Overage Calculation (Bkpt)
1,200,000
600,000
(1800000 − 1200000)
5
NA
NA
SPRT
PR percent (Prod/Lease Billable)
30,000
(600,000 × 5 percent)
30,000
100
750
9,000
Total Gross Billing
750
SPRT is the only product code that went over its breakpoint, so that product code owes the entire 5 percent. The total gross billing is calculated as:
(2,880,000.00 − 2,700,000.00) = (180,000 × 5 percent) = (9,000 ÷ 12) = 750.00.
When you run the Sales Overage Generation (R15120) for February 2007, the following results occur:
Lease breakpoint is 2,700,000.00 USD.
Gross sales are 525,000.00 USD (240,000 + 60,000 + 65,000 + 160,000).
Annualized sales are 3,150,000.00 USD (525,000 × 12 ÷ 2).
This table lists the details by product code:
Product Code
Description
Amount One
Amount Two
Percent
Billing Amount
Annualized Amount
CLTH
Sales (Period, Annualize)
60,000
600,000
(100,000 × 12 ÷ 2)
NA
NA
NA
ELEC
Sales (Period, Annualize)
65,000
690,000
(115,000 × 12 ÷ 2)
NA
NA
NA
SPRT
Sales (Period, Annualize)
160,000
1,860,000
(310,000 × 12 ÷ 2)
NA
NA
NA
SPRT
Overage Calculation (Bkpt)
1,200,000
660,000
(1,860,000 − 1,200,000)
5
NA
NA
SPRT
PR Percent (Prod/Lease Billable)
33,000
(660,000 × 5 percent)
33,000
100
3,750
22,500
Total Gross Billing
3,750
Prior Gross Billing
(750)
Current Gross Billing
3,000
Net Invoice Amount
3,000
Again, SPRT is the only product code that went over its breakpoint; so that product code owes the entire 5 percent. The total gross billing is calculated as:
3,150,000.00 − 2,700,000.00 = 450,000 × 5 percent = 22,500 ÷ 12 × 2 = 3,750.00
When you run the Sales Overage Generation (R15120) for March 2007, the following results occur:
Lease breakpoint is 2,700,000.00 USD.
Gross sales are 860,000.00 USD (525,000 + 90,000 + 70,000 + 175,000).
Annualized sales are 3,440,000.00 USD (860,000 × 12 ÷ 3).
This table lists the details by product code:
Product Code
Description
Amount One
Amount Two
Percent
Billing Amount
Annualized Amount
CLTH
Sales (Period, Annualize)
90,000
760,000.00
(190,000 × 12 ÷ 3)
NA
NA
NA
CLTH
Overage Calculation (Bkpt)
600,000
160,000
(760,000 − 600,000)
5.00
NA
NA
CLTH
PR Percent (Prod/Lease Billable)
8,000
(160,000×5 percent)
45,000
(8000 + 37000)
17.78
(8000/45000)
1,644.65
6,578.60
ELEC
Sales (Period, Annualize)
70,000
740,000
(185,000 × 12 ÷ 3)
NA
NA
NA
SPRT
Sales (Period, Annualize)
175,000
1,940,000
(485,000 × 12 ÷ 3)
NA
NA
NA
SPRT
Overage Calculation (breakpoint)
1,200,000
740,000
(1,940,000 − 1,200,000)
5.00
NA
NA
SPRT
PR Percent (Prod/Lease Billable)
37,000
(740,000 × 5 percent)
45,000
(37,000 + 8,000)
82.22
(37,000 ÷ 45,000)
7,605.35
30,421.40
Total Gross Billing
9,250.00
Prior Gross Billing
(3,750.00)
Current Gross Billing
5,500.00
Net Invoice Amount
5,500.00
Both CLTH and SPRT are over their respective breakpoints, and both product codes must share a percentage of the total billable. The total gross billing is calculated as:
(3,440,000.00 − 2,700,000.00) = (740,000 × 5 percent) = (37,000 ÷ 12 × 3) = 9,250.00
The billing amount for product code CLTH is 9,250.00 × 17.78 percent = 1,644.65
The billing amount for product code SPRT is 9,250.00 × 82.22 percent = 7,605.35
When you run the Sales Overage Generation (R15120) for April 2007, the following results occur:
Lease breakpoint is 2,700,000.00 USD.
Gross sales are 1,260,000.00 USD (860,000 + 95,000 + 125,000 + 180,000).
Annualized sales are 3,780,000.00 USD (1,260,000 × 12 ÷ 4).
This table lists the details by product code:
Product Code
Description
Amount One
Amount Two
Percent
Billing Amount
Annualized Amount
CLTH
Sales (Period, Annualize)
95,000
855,000
(285,000 × 12 ÷ 4)
NA
NA
NA
CLTH
Overage Calculation (Bkpt)
600,000
255,000
(855,000 − 600,000)
5
NA
NA
CLTH
PR Percent (Prod/Lease Billable)
12,750
(255,000×5 percent)
54,000
100
4,250
(12750 ÷ 12 × 4)
12,750
ELEC
Sales (Period, Annualize)
125,000
930,000
(310,000 × 12 ÷ 4)
NA
NA
NA
ELEC
Overage Calculation (Bkpt)
900,000
30,000
(930,000 − 900,000)
5
NA
NA
ELEC
PR percent (Prod/Lease Billable)
1,500
(30,000 × 5 percent)
54,000
100
500
(1500 ÷ 12 × 4)
1,500
SPRT
Sales (Period, Annualize)
180,000
1,995,000
(665000 × 12 ÷ 4)
NA
NA
NA
SPRT
Overage Calculation (Bkpt)
1,200,000
795,000
(1,995,000 − 1,000,000)
5
NA
NA
SPRT
PR Percent (Prod/Lease Billable)
39,750
(795,000 × 5 percent)
54,000
100
13,250
(39,750 ÷ 12 × 4)
39,750
Total Gross Billing
18,000
Prior Gross Billing
(9,250)
Current Gross Billing
8,750
Net Invoice Amount
8,750
Because all of the product codes are over their respective breakpoints, each owes the entire 5 percent. The total gross billing is calculated as follows:
(3,780,000.00 − 2,700,000.00) = (1,080,000 × 5 percent) = (54,000 ÷ 12 × 4) = 18,000.00