Standard sales-based sliding scale computation
A standard sales-based sliding scale is used to define a sliding scale for a standard sales-based charge. In Franchise Billing, a sliding scale is an optional table. It consists of a user-selected scale option, step limits, and percentages that are used to calculate a sales-based charge.
Specify each step limit of the scale along with the percentage of net sales for each step level. A step level is a line of a sliding scale. It contains a monetary value for a step limit of revenue and a charge percentage used to compute the associated sales based charge. A step limit is a sliding-scale monetary value. It represents a range in which contract net sales for the cycle must fall for the application to calculate the charge at the associated percentage.
If the scale option for the sliding scale is set to Use Highest Step Percentage, then upon release, this formula is used by sales entry to compute the charge:
Sales Based Charge = Net Sales * highest defined Charge Percent + Base Amount
If the scale option equals 2 (Add Step Levels Together), Franchise Billing uses this formula to compute the sales charge:
[(1st sales portion * 1st Charge Percent) + <(2nd sales portion * 2nd Charge Percent)> . . . + <(nth sales portion * nth Charge Percent)>] + Base Amount
Where 1st, 2nd, and nth sales portions are defined as:
- 1st sales portion: Amount of net sales that is less than or equal to the step limit amount defined in the 1st step level of the sliding scale.
- 2nd sales portion: If applicable, Amount of net sales that falls between the 1st step limit and the second step limit of the sliding scale.
- nth Net sales portion: Amount of net sales that falls between the next to the last defined step limit and the last defined step limit of the sliding scale.