[amp_mcq option1=”Rs. 1,050″ option2=”Rs. 2,100″ option3=”Rs. 500″ option4=”Rs. 1,000″ correct=”option1″]
The correct answer is A. Rs. 1,050.
The net profit is the gross profit minus the selling expense. In this case, the net profit is 40,000 – 29,500 = Rs. 10,500.
The manager is paid 5% commission on the net profit. This means that his commission is 5/100 * 10,500 = Rs. 525.
However, the commission is charged on the net profit after charging such commission. This means that the manager’s commission is actually 525/100 * 95% = Rs. 1,050.
Here is a brief explanation of each option:
- Option A: Rs. 1,050 is the correct answer.
- Option B: Rs. 2,100 is incorrect. This is the amount of commission that the manager would receive if he was paid 5% commission on the gross profit.
- Option C: Rs. 500 is incorrect. This is the amount of commission that the manager would receive if he was paid 5% commission on the selling expense.
- Option D: Rs. 1,000 is incorrect. This is the amount of commission that the manager would receive if he was paid 5% commission on the net profit before charging such commission.