Question

An agent is paid a 5% commission on all sales and an additional 2% del-credere commission on credit sales. If he sells goods worth ₹50,000 (of which ₹20,000 are credit sales), calculate his total earning.

Hint:

Remember the difference:

• {Ordinary Commission} → calculated on {total sales}.
• {Del-credere Commission} → calculated only on {credit sales}.

Add both commissions to obtain the agent’s total earnings.

Answer 1

Concept: In agency transactions:

• Ordinary commission is calculated on total sales.
• Del-credere commission is an additional commission given to the agent for guaranteeing credit sales, and it is calculated only on credit sales.

Step 1: Calculate the ordinary commission. Total sales = ₹50,000 \[ \text{Ordinary commission} = 5% \times 50,000 \] \[ = \frac{5}{100}\times 50,000 = ₹2,500 \]
Step 2: Calculate the del-credere commission. Credit sales = ₹20,000 \[ \text{Del-credere commission} = 2% \times 20,000 \] \[ = \frac{2}{100}\times 20,000 = ₹400 \]
Step 3: Find the total earning of the agent. \[ \text{Total earning} = \text{Ordinary commission} + \text{Del-credere commission} \] \[ = 2,500 + 400 = ₹2,900 \]
Step 4: Final Answer. \[ \boxed{\text{Total earning of the agent} = ₹2,900} \]