4.3 Brokerage:
We have studied so far selling and buying of
products. Let us study the providing of services. One such service provider is Real Estate Agency: The
agency gets requests from those who want
to buy lands, sites, houses, shops. Or
those who require shops/houses on rent.. He is also approached by people who
want to sell sites, houses, shops and others who are looking for tenants. The
real estate agency acts as ‘middle man’ between ‘buyers’ and ‘sellers’.
They charge ‘brokerage’ or ‘commission’ for
providing the services.
Same is the case with agencies who deal with buying
and selling of used cars.
You also must have heard about marriage
bureaus. They provide services in
finding matches for brides and bridegrooms.
Another service which is popular in major cities is
‘Placement services’
They collect details about people who seek
employments in companies. These agencies help the candidates in getting
suitable employment in companies. For their service they normally charge 10% of
employee’s salary. This is paid by companies
and not by job seekers.
The amount (fee) received by the agency for its
services are called ‘commission’ or ‘brokerage’.
It is not that this type of business is carried out
only by an agency always. An individual can also carry out this type of
business
An individual who acts as a ‘middleman’ between a buyer and seller is called a
’broker’ or ‘commission
agent.
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The commission or brokerage need not always be a
fixed % of sale price; it can also be a fixed amount as in the example:
‘One month rent is paid as brokerage for
identifying premises for a person who is in need of a house/shop on rent’
Generally, Brokerage is paid by purchaser,
Commission is paid by seller. Therefore
Net amount paid by purchaser =
Net amount received by seller =
Like in case of discount, we have similar formula:
Commission (Brokerage) = Commission%*Selling
price/100
From this formula we can arrive at formulae for
Commission % = Commission*100 /Selling price
Selling Price = Commission*100/ Commission %
4.3 Problem 1 : A farmer purchased a cow through a broker
whose selling price is Rs 10,000. If brokerage paid is 2 ½ % find the brokerage
and cost of cow,
Solution:
Brokerage = Commission%*Selling price/100 =
2.5*10000/100 = Rs 250
Cost of cow = Selling price + brokerage = 10000+250
= Rs 10,250
4.3 Problem 2: An agency
pays 15% commission to a paper distributor. The price of each news paper is Rs
3. If he sells 50 copies of news paper every day, find how much commission he
receives in a month and also net amount received by the Agency
Solution:
Price of each news paper = Rs 3.
Commission = Commission%*Selling price/100 =
15*450/100 = 67.5 Rs.
Net amount received by agency = selling price –
commission = 450 -67.5 = 382.5 Rs
4.3 Problem 3: The
Price of 8th standard
mathematics book is Rs. 15.75. A book
seller sells 1200 books and pays Rs 17,860.50 to the book publisher after deducting his commission. Find the commission rate.
Solution:
Since we are given total commission, we need to
know the total sale price of books.
The total sale price of books = Number of Books *
Price = 1200*15.75 =18900
Commission =
Commission % = Commission*100 /Selling price =
1039.5*100/18900 = 5.5%
Verification:
Commission for one book can be calculated as
Commission = Commission%*Selling price/100 =
5.5*15.75/100 = .86625
Commission for 1200 books = Number of Books *
Commission for one book = 1200*.86625 = 1039.5
Amount paid to the publisher =
4.3 Problem 4 : A farmer
sold his old tractor for Rs.68,000 with the help of an agent. If the commission
paid by the farmer is Rs 2550. Find
rate of commission, and the net Amount received by the
farmer.
Solution:
Commission % = Commission*100 /Selling price =
2550*100/68000 = 3.75%
Net amount received by farmer =
Verification:
Commission = Commission%*Selling price/100 =
3.75*68000/100 = Rs 2550 which is as given in the problem.
4.3 Problem 5 : A farmer
paid Rs.75 commission for selling vegetables. If the rate of commission is 2.5%
find the amount got by farmer after paying commission
Solution:
Selling Price = Commission*100/ Commission % =
75*100/2.5 = Rs 3000.
Amount received by farmer = Selling price –
commission = 3000-75 = Rs 2925
Verification:
Commission = Commission%*Selling price/100 =
2.5*3000/100 = Rs 75 which is as given in the problem.
4.3 Problem 6 : A company pays Rs 7000
salary per month and also 5% commission to an employee for selling
articles. If the employee receives Rs 9500 in one month, find the value of
articles sold by the employee.
Solution:
Since employee receives salary and also commission
we need to find out first his commission.
Commission = Amount received – Salary = 9500-7000 =
2500
Selling Price = Commission*100/ Commission % =
2500*100/5 = Rs 50,000.
Verification:
Commission = Commission%*Selling price/100
=5*50000/100 = Rs 2500
Amount received by the employee = Salary +
commission = Rs 7000+2500 = Rs.9500 which is as given in the problem.
4.3 Summary of learning
|
No |
Points to remember |
|
1 |
Commission
(Brokerage) = Commission%*Selling price/100 |
|
2 |
Commission
% = Commission*100 /Selling price |
|
3 |
Selling
Price = Commission*100/ Commission % |
