In a company, at the time of inflation, the number of employees are reduced in the ratio 3 : 2 and the salary of each employee is increased in the ratio 4 : 5. By doing so, the company saves 24, 000. So, find the initial expenditure on salary.
Solution
Correct Answer: Option D
Let 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 = 24000----- (1)
Then, initial expenditure = 12ab = 2ab × 6 (using (1))
= 144000
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