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Big sends 500 radios @ Rs. 200 each to small. All radios are sold by small at profit of 25% on cost. Small is entitles to a commission of Rs. 25 per radio sold plus 20% of gross sale proceeds as exceeds an amoount calculates @20% profit on coat. Calculate commission.?
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Big sends 500 radios @ Rs. 200 each to small. All radios are sold by ...
Calculation of Commission for Small:
Selling Price per Radio:
Big sells 500 radios to Small at Rs. 200 each, so the total selling price is 500 x 200 = Rs. 100,000.
Profit on Cost:
Small sells all the radios at a profit of 25% on cost. So, the cost price per radio for Small is Rs. 200 x (1 + 25%) = Rs. 250.
Commission Structure:
Small is entitled to a commission of Rs. 25 per radio sold plus 20% of the gross sale proceeds that exceed an amount calculated at 20% profit on cost.
Calculate Gross Sale Proceeds:
Small sells all the radios at Rs. 250 each, so the gross sale proceeds are 500 x 250 = Rs. 125,000.
Calculate Amount at 20% Profit on Cost:
20% profit on cost is Rs. 250 x 20% = Rs. 50.
So, the amount that Small needs to achieve at 20% profit on cost is Rs. 250 + Rs. 50 = Rs. 300 per radio.
Calculate Extra Gross Sale Proceeds:
The extra gross sale proceeds are Rs. 125,000 - (500 x 300) = Rs. 125,000 - Rs. 150,000 = -Rs. 25,000.
Since the extra gross sale proceeds are negative, Small does not exceed the amount calculated at 20% profit on cost.
Commission Calculation:
Since the extra gross sale proceeds are negative, Small does not receive any commission based on exceeding the amount calculated at 20% profit on cost.
Therefore, the commission for Small is Rs. 25 per radio sold, which is 500 x Rs. 25 = Rs. 12,500.
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Big sends 500 radios @ Rs. 200 each to small. All radios are sold by small at profit of 25% on cost. Small is entitles to a commission of Rs. 25 per radio sold plus 20% of gross sale proceeds as exceeds an amoount calculates @20% profit on coat. Calculate commission.?
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Big sends 500 radios @ Rs. 200 each to small. All radios are sold by small at profit of 25% on cost. Small is entitles to a commission of Rs. 25 per radio sold plus 20% of gross sale proceeds as exceeds an amoount calculates @20% profit on coat. Calculate commission.? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Big sends 500 radios @ Rs. 200 each to small. All radios are sold by small at profit of 25% on cost. Small is entitles to a commission of Rs. 25 per radio sold plus 20% of gross sale proceeds as exceeds an amoount calculates @20% profit on coat. Calculate commission.? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Big sends 500 radios @ Rs. 200 each to small. All radios are sold by small at profit of 25% on cost. Small is entitles to a commission of Rs. 25 per radio sold plus 20% of gross sale proceeds as exceeds an amoount calculates @20% profit on coat. Calculate commission.?.
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