Asked by Jennifer Feliz on May 01, 2024
Verified
In the first quarter of the year (January through March), a commission merchant sold several consignments of construction equipment, some used and some new. The sales price was $112,900 for the new equipment and $58,400 for the used equipment. The merchant charges commission rates of 10% to sell new equipment and 15% to sell used equipment. The merchant paid total freight charges of $2,490 to have the equipment delivered to the various buyers. Compute the net proceeds from the sales.
Commission Rates
The percentage or fixed payment associated with a commission, determined by the terms of the agreement.
Net Proceeds
The amount of money that remains after all costs, expenses, and taxes have been subtracted from the total amount received from a transaction.
Freight Charges
Fees associated with the transportation of goods, typically paid by the shipper or receiver of the goods.
- Determine the final proceeds from sales, taking into account the reduction for commissions.
- Determine net proceeds from sales after deducting freight charges.
Verified Answer
$58,400 0.15 = $8,760; $11,290 + $8,760 + $2,490 = $22,540;
$171,300 $22,540 = $148,760
Learning Objectives
- Determine the final proceeds from sales, taking into account the reduction for commissions.
- Determine net proceeds from sales after deducting freight charges.
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