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Calculation of Total sales

a) Credit sales (150 units @ ₹ 1,420 per unit) = 150 units X ₹ 1420 = ₹ 2,13,000

 

b) Cash sales (75 units @ ₹ 1,400 per unit) = 75 units X ₹ 1400 = ₹ 1,05,000

 

Therefore, total sales = ₹ 3,18,000

Calculation of specified selling price:

Cost price of the goods sent = ₹ 1,000 per unit

Profit = 20% on sales

Specified selling price = x

By applying the formula CP + Profit = Selling price, we get ₹ 1,000 + 0.20x = x

Therefore, x – 0.20x = ₹ 1,000

0.80x = ₹ 1,000

x = ₹ 1,000 / 0.80 = ₹ 1,250

Therefore, specified selling price = ₹ 1250

 

Note: Specified selling price is the price at which the consignor wants his goods to be sold by the consignee

Calculation of sales at specified selling price

Quantity of goods sold = 225 units

Specified selling price = ₹ 1,250 per unit

Therefore sales at specified selling price = 225units X ₹ 1,250 = ₹ 2,81,250

This means to say that consignor was expecting ₹ 2,81,250 by selling 225 units. But these goods were sold for ₹ 3,18,000, which is more than the expectations and hence consignee is eligible for over-riding commission

Calculation of Surplus:

Surplus = Actual sale proceeds – sales at specified selling price

= ₹ 3,18,000 (W. N. No.1) – ₹ 2,81,250 (W. N. No.3)

= ₹ 36,750

Hence, consignee will be eligible for an over-riding commission of the surplus of ₹ 36,750

  1. Calculation of total commission:
     
    Quantity of goods sold = 225 units
     
    Commission payable = ₹ 50 per unit
     
    Therefore, total commission = 225 units X ₹ 50 = ₹ 11,250

     

    Note: Commission is always payable on the quantity of goods sold and not on quantity of goods sent and hence it should be calculated on 225 units and not on 250 units

  2. Calculation of total commission:
     
    Total sale proceeds (as per working note no.1) = ₹ 3,18,000
     
    Rate of commission = 5%
     
    Therefore total commission = ₹ 3,18,000 X 5/100 = ₹ 15,900

     

    Note: Commission is always payable on actual total sale proceeds and not on sales at specified selling price or cost price

  3. Calculation of total commission:
     
    Total sale proceeds (as per working note no.1) = ₹ 3,18,000
     
    Ordinary commission @ 5% = ₹ 3,18,000 X 5% = ₹ 15,900
     
    Del-credere commission @ 2% = ₹ 3,18,000 X 2% = ₹ 6,360
     
    Therefore, total commission = ₹ 22,260

     

    Note: Unless specifically given, Del-credere commission should also be calculated on the total sales made by the consignee and not only on the credit sales

  4. Calculation of total commission:
     
    Total sale proceeds (as per working note no.1) = ₹ 318000
     
    Ordinary commission @ 5% = ₹ 3,18,000 X 5% = ₹ 15,900
     
    Del-credere commission @ 2% on credit sales = ₹ 2,13,000 X 2% = ₹ 4,260
     
    Therefore, total commission = ₹ 20,160
  5. Calculation of total commission:
     
    Total sale proceeds (as per working note no.1) = ₹ 3,18,000
     
    Ordinary commission @ 5% = ₹ 3,18,000 X 5% = ₹ 15,900
     
    Del-credere commission @ 2% = ₹ 3,18,000 X 2% = ₹ 6,360
     
    Over-riding commission @ 25% on surplus (W. N. No.4) = ₹ 36,750 X 25% = ₹ 9,187.50
     
    Therefore, total commission = ₹ 31,447.50
  6. Calculation of total commission:
     
    Total sale proceeds (as per working note no.1) = ₹ 3,18,000
     
    Ordinary commission @ ₹ 50 per unit = 225units X ₹ 50 = ₹ 11,250
     
    Del-credere commission @ 2% = ₹ 3,18,000 X 2% = ₹ 6,360
     
    Over-riding commission @ 25% on surplus (W. N. No.4) = ₹ 36,750 X 25% = ₹ 9,187.50
     
    Therefore, total commission = ₹ 26,797.50
  7. Calculation of total commission:
     
    Let the total commission payable to consignee be ‘x’. This total commission ‘x’ has got two components
     
    a) Fixed commission = ₹ 50 per unit
     
    b) Variable commission = 1/5 (Gross sale proceeds – x (total commission) – sum calculated at specified selling price)
     
    Hence, we can write the equation as follows:
     
    x= (50 X 225) + 1/5 (3,18,000 – x – 2,81,250)
     
    x = 11,250 + 1/5 (3,6750 – x)
     
    x = 11,250 + 7,350 – 0.20x
     
    1.2 x = ₹ 18,600
     
    X= ₹ 18,600 / 1.2 = ₹ 15,500
     
    Therefore, total commission in this case = ₹ 15,500





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