Accountancy Mathematics: Incomplete Records -”Computation of Manager’s Commission

August 20th, 2006 /

In Incomplete records, examination question often includes manager’s commission.

The commission may be expressed as a percentage of profits AFTER such commission had been deducted.

Illustration:

The net profits of a business are $500,000 and the manager is entitled to 10% of the net profits AFTER such commission has been deducted.

Question: Compute his commission?

Solution:

Percentage Commission x Profits before Commission

100 +% Commission

=10/110 x $500,000

= $45,454.50