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Factory manager gets 10% commission on net profit after charging such commission. If profit is Rs. 2200 then commission will be?

A. Rs. 220

B. Rs. 200

C. Rs. 240

D. Rs. 244.44

Answer: Option B

Solution (By Examveda Team)

Here's how to solve this commission problem:

The factory manager gets a commission on the net profit *after* the commission itself is deducted.
This means we can't simply take 10% of Rs. 2200.

Let's say the commission amount is 'C'.
Then the net profit *after* commission is (Rs. 2200 - C).

The commission is 10% of this net profit, so we can write the equation: C = 0.10 * (2200 - C).

Now, let's solve for C:
C = 220 - 0.10C
C + 0.10C = 220
1.10C = 220
C = 220 / 1.10
C = 200

Therefore, the commission will be Rs. 200.

So, the correct answer is Option B: Rs. 200.

This Question Belongs to Commerce >> Accounting

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Comments (1)

  1. Sheikh Bilal
    Sheikh Bilal:
    7 months ago

    correct answer is option "A" because here is commission on net profit after charging available not before charging. these are two thing.
    1- commission= Rate*net profit after commission / 100
    2- commission = Rate/100+Rate* profit before commission

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