The number of employees in a company is reduced in the ratio 3 : 2 and the salary of each employee is increased in the ratio 4 : 5. By doing so, company saves 12,000. So, find the initial expenditure of the company on salary.
Solution
Correct Answer: Option A
Let the number of employees earlier = ‘3a’
Then, number of employees now = ‘2a’.
∵ Average salary of employees earlier = ‘4b’,
∴ Average salary of employees now = ‘5b’.
⇒ Total salary of employees earlier = 3a × 4b = 12ab
⇒ Total salary of employees now = 2a × 5b = 10ab
∴ Difference = 12ab – 10ab
= 2ab
Given that,
⇒ 2ab = 12,000
Then, initial expenditure = 12ab = 2ab × 6
= 72000
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