Question : A manager gets a 5% commission on net profit after charging such a commission. Gross profit is Rs. 5,80,000, and indirect expenses other than the manager's commission are Rs. 1,60,000. The commission amount will be
Option 1: Rs. 21,000
Option 2: Rs. 20,000
Option 3: Rs. 13,000
Option 4: Rs. 22,000
Correct Answer: Rs. 20,000
Solution :
Answer =
Rs. 20,000.
Manager's commission=N.P(5,80,000-1,60,000)=$\frac{420000 \times 5}{105}=20000$.
Hence, the correct option is 2.