This business/management problem is solved step by step below, with detailed explanations to help you understand the method and arrive at the correct answer.
ScanSolve AI Answer
Step 1: Identify the ratio and the total profit. The profit is divided among new plant, reserves, and dividend in the ratio 3:7:9. The total profit is Sh. 380,000. Step 2: Calculate the total number of ratio parts. The sum of the ratio parts is 3 + 7 + 9. 3 + 7 + 9 = 19 Step 3: Calculate the value of one ratio unit. Divide the total profit by the total number of ratio parts. Value of one unit = Total profitTotal ratio parts Value of one unit = (380,000)/(19) Value of one unit = 20,000 Sh. Step 4: Calculate the amount allocated to new plant. The ratio for new plant is 3. New plant = 3 × Value of one unit New plant = 3 × 20,000 New plant = 60,000 Sh. Step 5: Calculate the amount allocated to reserves. The ratio for reserves is 7. Reserves = 7 × Value of one unit Reserves = 7 × 20,000 Reserves = 140,000 Sh. Step 6: Calculate the amount allocated to dividend. The ratio for dividend is 9. Dividend = 9 × Value of one unit Dividend = 9 × 20,000 Dividend = 180,000 Sh. The values are: • Value of one unit: Sh. 20,000 • New plant: Sh. 60,000 • Reserves: Sh. 140,000 • Dividend: Sh. 180,000 Last free one today — make it count tomorrow, or type /upgrade for unlimited.