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In 1980 the net monthly income of employee was 800/-per month . the consumer price index number was 160 in 1980 . it rises 200 in 1984 . if he has to be rightly compensated . the additional D.A. to be paid to the employee ??
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In 1980 the net monthly income of employee was 800/-per month . the co...
Calculation of Additional D.A. for the Employee
- Step 1: Find the percentage increase in CPI from 1980 to 1984
- CPI increase = (200-160)/160 x 100% = 25%
- Step 2: Calculate the new cost of living
- New cost of living = 800 x 1.25 = 1000
- Step 3: Find the difference between the new cost of living and the original net income
- Difference = 1000 - 800 = 200
- Step 4: Calculate the additional D.A. to be paid to the employee
- Additional D.A. = Difference x 100 / Original net income
- Additional D.A. = 200 x 100 / 800 = 25%
- Therefore, the additional D.A. to be paid to the employee is 25%
Explanation
The Consumer Price Index (CPI) measures the average change in prices of goods and services consumed by households over time. The CPI in 1980 was 160 and it increased to 200 in 1984, which means that the cost of living increased by 25%. To compensate the employee for this increase in cost of living, the employer needs to pay additional Dearness Allowance (D.A.) to the employee.
In this case, the net monthly income of the employee in 1980 was 800/-. To calculate the additional D.A., we need to find the difference between the new cost of living and the original net income, which is 200/- (1000-800). The additional D.A. is then calculated as a percentage of the original net income, which is 25% in this case. Therefore, the employer needs to pay an additional D.A. of 25% to the employee to compensate for the increase in cost of living.
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In 1980 the net monthly income of employee was 800/-per month . the consumer price index number was 160 in 1980 . it rises 200 in 1984 . if he has to be rightly compensated . the additional D.A. to be paid to the employee ??
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In 1980 the net monthly income of employee was 800/-per month . the consumer price index number was 160 in 1980 . it rises 200 in 1984 . if he has to be rightly compensated . the additional D.A. to be paid to the employee ?? 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 In 1980 the net monthly income of employee was 800/-per month . the consumer price index number was 160 in 1980 . it rises 200 in 1984 . if he has to be rightly compensated . the additional D.A. to be paid to the employee ?? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for In 1980 the net monthly income of employee was 800/-per month . the consumer price index number was 160 in 1980 . it rises 200 in 1984 . if he has to be rightly compensated . the additional D.A. to be paid to the employee ??.
In 1980 the net monthly income of employee was 800/-per month . the consumer price index number was 160 in 1980 . it rises 200 in 1984 . if he has to be rightly compensated . the additional D.A. to be paid to the employee ?? 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 In 1980 the net monthly income of employee was 800/-per month . the consumer price index number was 160 in 1980 . it rises 200 in 1984 . if he has to be rightly compensated . the additional D.A. to be paid to the employee ?? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for In 1980 the net monthly income of employee was 800/-per month . the consumer price index number was 160 in 1980 . it rises 200 in 1984 . if he has to be rightly compensated . the additional D.A. to be paid to the employee ??.
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