Multiple choice

Directions : Answer the question independently. Labour allocation is a very important process. A particular weaving section has 20 looms and with five labourers loom efficiency is 75% and production of a loom at 100% efficiency is 10 meter per hour. Salary of a labourer is Rs.11000 per month. I removed one labourer due to which efficiency came down to 70%. How much do I gain or lose due to this action? Assume that profit on one meter cloth is Rs.4 and looms are working for 30 days in a month and 10 hours per day.

  1. Rs.1000 profit

  2. Rs.1500 loss

  3. Rs.1500 profit

  4. Rs.1000 loss
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Initial production: 20 looms * 10 m/hr * 0.75 efficiency * 300 hrs = 45,000 m. Profit = 45,000 * 4 = 180,000. Costs = 5 * 11,000 = 55,000. Net = 125,000. New production: 20 looms * 10 m/hr * 0.70 efficiency * 300 hrs = 42,000 m. Profit = 42,000 * 4 = 168,000. Costs = 4 * 11,000 = 44,000. Net = 124,000. Loss = 125,000 - 124,000 = 1,000.

AI explanation

Using the production formula, 5 laborers produce 20 looms multiplied by 10 meters multiplied by 75% efficiency multiplied by 300 hours, which equals 45,000 meters and a profit of Rs. 180,000. With 4 laborers, production drops to 20 multiplied by 10 multiplied by 70% multiplied by 300, equaling 42,000 meters and a profit of Rs. 168,000. Subtracting the saved salary of Rs. 11,000 from the Rs. 12,000 drop in profit results in a net loss of Rs. 1,000.

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