CMA Foundation · Fundamentals of Financial and Cost Accounting · Consignment
A consignee sold goods on consignment for ₹3,00,000, of which ₹60,000 was sold on credit. Commission is 4% on total sales plus a del credere commission of 1% on credit sales. What is the total commission earned by the consignee?
Total commission is ₹12,600. The ordinary commission is 4% of the total sales of ₹3,00,000, which is ₹12,000, and the del credere commission is 1% of the credit sales of ₹60,000, which is ₹600. Del credere applies only to credit sales.
- A₹12,600Correct
- B₹12,000
- C₹15,000
- D₹12,060
Explanation
Ordinary commission = 4% × 3,00,000 = ₹12,000. Del credere commission = 1% × credit sales 60,000 = ₹600. Total = ₹12,600. Applying del credere to total sales gives ₹15,000, which is wrong because it applies only to credit sales.
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