Calculate the amount of A's Commission from the following items
Net profit before commission ₹1,65,000 and Mr. A is entitled for a commission of 10% of net profit after charging such commission.
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → ₹15,000
The commission is 10% of the profit after charging the commission itself. So the profit before commission = 110 parts, of which 10 parts are commission.
Commission = ₹1,65,000 × 10/110
= ₹15,000
Check: ₹1,65,000 − ₹15,000 = ₹1,50,000, and 10% of ₹1,50,000 = ₹15,000.