Question

Punjab Cycle of Ludhiana consigned 100 bicycles to Kanpur Cycle costing Rs. 1,500 each, invoiced at Rs. 2,000 each.Kanpur Cycle sent an account sales showing that 80 bicycles had been sold @ Rs. 2,200 each.Kanpur Cycle is entitled to a commission of 5% on invoice price and 25% on any surplus of sale price over invoice price.
Commission payable to Kanpur Cycle is _________ .

• A. Rs. 13,530
• B. Rs. 6,000
• C. Rs. 4,000
• D. Rs. 12,000

Answer 1

The correct option is D Rs. 12,000

Commission on sales : Sale proceeds of 80 tricycles $=80\times Rs.2,200$ Less : invoice price of 80 tricycles $=80\times Rs.2,000$	1,76,000 1,60,000
Surplus of sale sale price over invoice price	16,000
commision : 5% of Rs . 1,60,000 the invoice price of goods sold Add: 25% Rs. 16,000 the surplus.	8,000 4,000
	12,000