CMA Intermediate · Financial Accounting · Consignment
Iyer Mills consigned 2,000 units to Das at an invoice price of Rs 100 (cost Rs 80). Das sold 1,500 units at Rs 130 each. Commission is 5% on sales, plus overriding commission of 20% on the excess of sale price over invoice price, on units sold. What is the consignee's total commission?
Sales are Rs 1,95,000, giving 5% commission of Rs 9,750. The excess over invoice is Rs 45,000, and 20% overriding commission is Rs 9,000. The total is Rs 18,750.
- ARs 9,750
- BRs 15,750Correct
- CRs 18,000
- DRs 20,250
Explanation
Sales = 1,500 x 130 = 1,95,000. Ordinary commission at 5% = 9,750. Excess over invoice = 1,500 x 30 = 45,000; 20% = 9,000. Total = 18,750. The nearest option cannot be justified, so the correct result is 18,750.
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