Vidyalelo
Commerce · Q1114

Accounting

Graduate and Post Graduate · Commerce · question 1114

Q1114

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
Answer
C.
Rs. 240
D.
Rs. 244.44

Answer: Option B

Solution

Answer: Option B
Solution:
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.