If the deed says commission is on profit after charging commission, what must be considered in calculation?

Correct answer: Commission must be calculated by including it in the base adjustment

A commission calculated after charging commission is different from a commission calculated on profit before commission. The commission itself reduces the profit on which it is based, so the amount cannot be found by simply multiplying the original profit by the rate. The commission must be treated as part of the adjustment to the profit base. This is commonly called a commission on profit after commission and requires an appropriate algebraic formula when the rate is given.

Therefore, choice A is the best answer: commission must be calculated by including it in the base adjustment. If profit before commission is represented by P and the rate is r, the commission C satisfies the relationship C = r(P − C), with r written as a decimal. Solving gives C = rP/(1+r). The question gives no rate, so no numerical amount can be calculated, but the required method is clear. The supplied answer is consistent.