Question

16. Net profit ofte firm is 79,800.
Manager is entitled to a cornmission
of 5% of profits after charging his
commission. Manager's Commission
will be:*
O (A) 4200
O (b) 380
O (C) 3,990
O (D) 3,800​

Answer 1

Given:

The net profit of the firm is 79,800.  The manager is entitled to a commission of 5% of profits after charging his commission.

To Find:

Manager's Commission  will be:

(A) 4200

(b) 380

(C) 3,990

(D) 3,800

Solution:

Calculation of commission after charging such commission means that the commission needs to be calculated from the net profit which is arrived at after deducting all the expenses including such commission.

The formula for Manager's commission is,

$Commission =\frac{net profit*rate of commission}{100\%+rate of commission}$

Now calculating the value by putting the values,

$Commission=\frac{79800*5\%}{100\%+5\%} \\=3800$

Hence, the correct option is (d).​

Answer 2

option (D) 3,800

Explanation:

Given :

• Net profit of the firm = 79,800.
• Manager is entitled to a commission of 5% of profits after charging his commission.

To find :

• Manager's Commission

Solution :

Net profit of the firm = 79,800

Manager is entitled to a commission of 5% profits after charging his commission.

Manager’s Commission = Profit before commission × (Commission Rate/100 + Commission Rate)

= 79,800 × [5/(100 + 5)]

= 79,800 × (5/105)

= 3,800

Manager’s Commission = 3,800

Hence, option (D) 3,800

Manager’s Commission will be 3,800