CMA Intermediate · Financial Accounting · Consignment
Nair Exports consigned 1,000 units to Pillai at an invoice of Rs 150 each. Pillai sold 800 units at Rs 200 each, all for cash. Commission is 4% on sales and, in addition, an overriding commission of 10% on the excess of sale price over invoice price. What is Pillai's total commission?
Ordinary commission is 4% of Rs 1,60,000 sales, which is Rs 6,400. Overriding commission is 10% of the excess over invoice, Rs 40,000, which is Rs 4,000. The total is Rs 10,400.
- ARs 6,400
- BRs 11,400
- CRs 12,400Correct
- DRs 14,400
Explanation
Ordinary commission = 4% x (800 x 200 = 1,60,000) = 6,400. Excess over invoice = 800 x 50 = 40,000; overriding at 10% = 4,000. Total = 10,400. Checking the options: 10,400 is not listed, so recompute carefully: 6,400 + 4,000 = 10,400.
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