Index NumbersMCQPYQ Dec 23Question 3890 of 197
All Questions

The gross monthly pay of an employee was 15,000\displaystyle 15,000 in a year 2020\displaystyle 2020. The consumer price index number in 2023\displaystyle 2023 is 155\displaystyle 155 with 2020\displaystyle 2020 as base year. If employee is to rightly compensate what dearness allowance is required to be paid?

Options

A8,000\displaystyle 8,000
B8,250\displaystyle 8,250
C8,500\displaystyle 8,500
D8,750\displaystyle 8,750
For any discrepancies in this question, email contact@cadada.in

Correct Answer

Option b8,250\displaystyle 8,250

All Options:

  • A8,000\displaystyle 8,000
  • B8,250\displaystyle 8,250
  • C8,500\displaystyle 8,500
  • D8,750\displaystyle 8,750

Ad

Detailed Solution & Explanation

We are given: - Base year pay (2020) = 15,000\displaystyle 15,000 - CPI in current year (2023) = 155\displaystyle 155 (with base year as 100) The required pay in 2023 to maintain the same standard of living is: Required Pay=Base Pay×CPI100=15000×155100=23250\text{Required Pay} = \text{Base Pay} \times \frac{\text{CPI}}{100} = 15000 \times \frac{155}{100} = 23250 The Dearness Allowance (DA) is the additional compensation required to bridge this gap: DA Required=Required PayBase Pay=2325015000=8250\text{DA Required} = \text{Required Pay} - \text{Base Pay} = 23250 - 15000 = 8250 Alternatively: DA=Base Pay×CPI100100=15000×0.55=8250\text{DA} = \text{Base Pay} \times \frac{\text{CPI} - 100}{100} = 15000 \times 0.55 = 8250 Hence, **Option B** is the correct answer.

About This Chapter: Index Numbers

Paper

Paper 3: Quantitative Aptitude

Weightage

4-6 Marks

Key Topics

Construction of Index Numbers, Time Series

This chapter covers Construction of Index Numbers, Time Series and is part of Paper 3: Quantitative Aptitude in the CA Foundation exam.

View Official ICAI Syllabus

Exam Strategy Tip

This topic carries 4-6 Marks weightage. Focus on understanding core concepts rather than memorizing.

Key Concepts to Understand

Related Comparison Tables

More Questions from Index Numbers

Ready to Master Index Numbers?

Practice all 197 questions with instant feedback, earn XP, track your streaks, and ace your CA Foundation exam.

Start Practicing — It's Free