The Petunia Corporation grows and consigns flowering plants to retailers. The consignee receives a sales commission of 20%. Also, he is paid to water and care for the plants in his possession. Dead plants are discarded but cannot exceed 15% of the plants shipped or the consignee must pay the cost price for them. Freight charges are to be borne by the consignor. Each plant costs $0.25 to grow and prepare for shipment and is to be sold for $1. The consignee must bear sales costs such as clerks' salary, light, rent, and depreciation of display counters. The consignee is a del credere agent. Throughout 19x6, Petunia Corporation shipped a total of 2,000 plants to Gigantic Department store. Of these, 1 ,500 were sold and 60 were discarded. Freight cost $200 and was paid by Gigantic. Clerks' salaries, rent, light, and depreciation was $125. Watering cost $110. One-third of the sales were on credit, of which $200 is still outstanding and $10 had been written off as uncollectible. Both companies record consignments separately from other transactions.
1. The profit on consignments for the consignee is A. $155. B. $165. c. $290. D. $300.
2. The profit on consignment sales for the consignor is A. $544. B. $565. c. $672. D. $923.