When a producer allows 36% commission on the retail price of his product, he…
2025
When a producer allows 36% commission on the retail price of his product, he earns a profit of 8.8%. What would be his profit if the commission is reduced by 24%?
- A.
36.6%
- B.
49.6%
- C.
59.6%
- D.
45.6%
Attempted by 5 students.
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Correct answer: B
Let the retail price be 100 units. Initial commission is 36%, so revenue received by the producer is 100 - 36 = 64 units. Given an 8.8% profit, the Cost Price (CP) is calculated as Revenue / (1 + Profit%) = 64 / 1.088 ≈ 58.82 units. If the commission is reduced by 24 percentage points, the new commission rate becomes 36% - 24% = 12%. The new revenue is 100 - 12 = 88 units. The new profit amount is New Revenue - CP = 88 - 58.82 = 29.18 units. The new profit percentage is (New Profit / CP) * 100 = (29.18 / 58.82) * 100 ≈ 49.6%.