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General Manager gets 6% commission on net profit after charging such commission. Gross profit Rs.60,000 and other indirect expenses other than manager's commission are Rs.7,000. Commission amount will be
a)
Rs.3,000b)
Rs.3,396c)
Rs.3,500 d)
None of the aboveCorrect answer is option 'A'. Can you explain this answer?
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General Manager gets 6% commission on net profit after charging such c...
Calculation of General Manager's Commission:
Gross Profit = Rs.60,000
Indirect Expenses (Other than Manager's Commission) = Rs.7,000
Net Profit = Gross Profit - Indirect Expenses = Rs.53,000
Commission on Net Profit = 6%
Commission Amount = 6% of Rs.53,000 = Rs.3,180
However, the commission is charged on the net profit after deducting the commission amount. Hence, the commission charged will be:
Commission Charged = 6% of (Rs.53,000 - Rs.3,180) = Rs.3,000
Therefore, the correct option is A) Rs.3,000.
Explanation:
The General Manager is entitled to receive a commission on the net profit earned by the company after deducting all the expenses. In this case, the gross profit earned by the company is Rs.60,000, and the indirect expenses other than the Manager's commission are Rs.7,000. Hence, the net profit earned by the company is Rs.53,000.
The General Manager's commission is 6% of the net profit earned by the company. However, the commission is charged on the net profit after deducting the commission amount. Hence, the commission charged will be 6% of (Rs.53,000 - Rs.3,180) = Rs.3,000.
Therefore, the correct option is A) Rs.3,000.
Gross Profit = Rs.60,000
Indirect Expenses (Other than Manager's Commission) = Rs.7,000
Net Profit = Gross Profit - Indirect Expenses = Rs.53,000
Commission on Net Profit = 6%
Commission Amount = 6% of Rs.53,000 = Rs.3,180
However, the commission is charged on the net profit after deducting the commission amount. Hence, the commission charged will be:
Commission Charged = 6% of (Rs.53,000 - Rs.3,180) = Rs.3,000
Therefore, the correct option is A) Rs.3,000.
Explanation:
The General Manager is entitled to receive a commission on the net profit earned by the company after deducting all the expenses. In this case, the gross profit earned by the company is Rs.60,000, and the indirect expenses other than the Manager's commission are Rs.7,000. Hence, the net profit earned by the company is Rs.53,000.
The General Manager's commission is 6% of the net profit earned by the company. However, the commission is charged on the net profit after deducting the commission amount. Hence, the commission charged will be 6% of (Rs.53,000 - Rs.3,180) = Rs.3,000.
Therefore, the correct option is A) Rs.3,000.
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Community Answer
General Manager gets 6% commission on net profit after charging such c...
Gross Profit=60000-7000=53000
Manager's commission after charging such commission=53000x6/106=3000
Manager's commission after charging such commission=53000x6/106=3000
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General Manager gets 6% commission on net profit after charging such commission. Gross profit Rs.60,000 and other indirect expenses other than manager's commission are Rs.7,000. Commission amount will bea)Rs.3,000b)Rs.3,396c)Rs.3,500d)None of the aboveCorrect answer is option 'A'. Can you explain this answer?
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