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Suppose a business executive was earning Rs. 2050 in the base period what should be his salary in the current period if his standard of living is to remain the same? given ΣW= 25 and IW = 3544?
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Suppose a business executive was earning Rs. 2050 in the base period w...
Calculation of Salary Increase
To calculate the salary increase for the business executive, we need to use the Consumer Price Index (CPI) formula, which is calculated as follows:
CPI = (Cost of basket in current period / Cost of basket in base period) x 100
Calculation of Cost of Basket
The cost of basket is the total cost of goods and services consumed by the executive in the base period and the current period. To calculate the cost of basket, we need to use the following formula:
Cost of basket = ΣW x IW
Where ΣW is the sum of the weights of all goods and services consumed, and IW is the price index of each good and service.
Calculation of CPI
Using the above formula, we can calculate the CPI as:
CPI = (Cost of basket in current period / Cost of basket in base period) x 100
Let's assume that the cost of basket in the base period was Rs. 1000. Therefore, the cost of basket in the current period would be:
Cost of basket in current period = ΣW x IW = 25 x 3544 = Rs. 88,600
Using the CPI formula, we can calculate the CPI as:
CPI = (88,600 / 1000) x 100 = 8860
Calculation of Salary Increase
Now that we have calculated the CPI, we can use it to calculate the salary increase for the business executive. Let's assume that the executive's salary in the base period was Rs. 2050. To calculate his salary in the current period, we can use the following formula:
New salary = (CPI in current period / CPI in base period) x Old salary
Using the above formula, we can calculate the executive's salary in the current period as:
New salary = (8860 / 100) x 2050 = Rs. 181,130
Therefore, the business executive's salary in the current period should be Rs. 181,130 if his standard of living is to remain the same.
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Suppose a business executive was earning Rs. 2050 in the base period what should be his salary in the current period if his standard of living is to remain the same? given ΣW= 25 and IW = 3544?
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Suppose a business executive was earning Rs. 2050 in the base period what should be his salary in the current period if his standard of living is to remain the same? given ΣW= 25 and IW = 3544? 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 Suppose a business executive was earning Rs. 2050 in the base period what should be his salary in the current period if his standard of living is to remain the same? given ΣW= 25 and IW = 3544? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Suppose a business executive was earning Rs. 2050 in the base period what should be his salary in the current period if his standard of living is to remain the same? given ΣW= 25 and IW = 3544?.
Suppose a business executive was earning Rs. 2050 in the base period what should be his salary in the current period if his standard of living is to remain the same? given ΣW= 25 and IW = 3544? 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 Suppose a business executive was earning Rs. 2050 in the base period what should be his salary in the current period if his standard of living is to remain the same? given ΣW= 25 and IW = 3544? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Suppose a business executive was earning Rs. 2050 in the base period what should be his salary in the current period if his standard of living is to remain the same? given ΣW= 25 and IW = 3544?.
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