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Net Monthly income of an employee was Rs. 800 in 1980. The consumer price Index number was 160 in 1980. It is rises to 200 in 1984. If he has to be rightly compensated. The additional dearness allowance to be paid to the employee is :
  • a)
    Rs. 200
  • b)
    Rs. 275
  • c)
    Rs. 250
  • d)
    None of these.
Correct answer is option 'A'. Can you explain this answer?
Most Upvoted Answer
Net Monthly income of an employee was Rs. 800 in 1980. The consumer pr...
Calculation of Additional Dearness Allowance

Given data:
Net Monthly income in 1980 = Rs. 800
Consumer Price Index (CPI) in 1980 = 160
CPI in 1984 = 200

Step 1: Calculation of Inflation Rate
Inflation Rate = ((CPI in 1984 - CPI in 1980) / CPI in 1980) x 100
= ((200 - 160) / 160) x 100
= 25%

Step 2: Calculation of New Net Monthly Income
New Net Monthly Income = Net Monthly Income in 1980 + (Inflation Rate x Net Monthly Income in 1980)
= 800 + (25% x 800)
= Rs. 1000

Step 3: Calculation of Additional Dearness Allowance
Additional Dearness Allowance = New Net Monthly Income - Net Monthly Income in 1980
= 1000 - 800
= Rs. 200

Therefore, the additional dearness allowance to be paid to the employee is Rs. 200.
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Community Answer
Net Monthly income of an employee was Rs. 800 in 1980. The consumer pr...
Additional dearness allowance to be paid
= [800 × 200 ÷ 160] - 800
= 1,000 - 800
= 200/-
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Net Monthly income of an employee was Rs. 800 in 1980. The consumer price Index number was 160 in 1980. It is rises to 200 in 1984. If he has to be rightly compensated. The additional dearness allowance to be paid to the employee is :a)Rs. 200b)Rs. 275c)Rs. 250d)None of these.Correct answer is option 'A'. Can you explain this answer?
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Net Monthly income of an employee was Rs. 800 in 1980. The consumer price Index number was 160 in 1980. It is rises to 200 in 1984. If he has to be rightly compensated. The additional dearness allowance to be paid to the employee is :a)Rs. 200b)Rs. 275c)Rs. 250d)None of these.Correct answer is option 'A'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Net Monthly income of an employee was Rs. 800 in 1980. The consumer price Index number was 160 in 1980. It is rises to 200 in 1984. If he has to be rightly compensated. The additional dearness allowance to be paid to the employee is :a)Rs. 200b)Rs. 275c)Rs. 250d)None of these.Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Net Monthly income of an employee was Rs. 800 in 1980. The consumer price Index number was 160 in 1980. It is rises to 200 in 1984. If he has to be rightly compensated. The additional dearness allowance to be paid to the employee is :a)Rs. 200b)Rs. 275c)Rs. 250d)None of these.Correct answer is option 'A'. Can you explain this answer?.
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