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Question 36 of 75
Q.

(a) (I) From the following data, calculate the value of operating surplus :

S.No.ItemsAmount in (₹ crore)
(i)Royalty5
(ii)Rent75
(iii)Interest30
(iv)Net domestic product at factor cost400
(v)Profit45
(vi)Dividends20

(II) Distinguish between 'Fixed Investment' and 'Inventory Investment'.

OR (b) (I) From the following data, calculate the value of compensation of employees (COE) :

S.No.ItemsAmount in (₹ crore)
(i)Old age pension2,000
(ii)Wages and salaries in cash60,000
(iii)Rent free accommodation to employees30,000
(iv)Employer's contribution to provident fund7,500
(v)Payment of life insurance premium by the employees2,500
(vi)Contribution to provident fund by employees35,000

(II) Distinguish between stock and flow variables.

Himachal HpboseCBSE Class XII Board 2022Subjective· 5mImportance★★★★★
48% · 36/75 Questions
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  • Part (a): Operating surplus = Rent+Royalty+Interest+Profit = 75+5+30+45 = ₹155 crore; fixed investment builds long-lived assets, inventory investment is the change in stocks.
  • Part (b): COE = wages(cash)+wages(kind)+employer's PF = 60000+30000+7500 = ₹97,500 crore; stock is measured at a point in time, flow over a period.

Part (a)

(I) Operating Surplus.

Net Domestic Product at factor cost splits into compensation of employees, operating surplus, and mixed income. Operating surplus is the income from property and entrepreneurship — Rent + Royalty + Interest + Profit.

Operating Surplus=Rent+Royalty+Interest+Profit\text{Operating Surplus} = \text{Rent} + \text{Royalty} + \text{Interest} + \text{Profit}

Operating Surplus=75+5+30+45=155 crore\text{Operating Surplus} = 75 + 5 + 30 + 45 = 155 \text{ crore}

Watch out

Dividends (₹20 crore) are a part of profit — do not add them separately. NDP at FC (₹400 crore) is not required to find operating surplus.

(II) Fixed Investment vs Inventory Investment. Both are parts of gross capital formation.

BasisFixed InvestmentInventory Investment
DefinitionExpenditure on fixed assets used repeatedly in productionChange in stock of raw materials, semi-finished goods and unsold output
DurabilityLong-lived (more than one year)Short-lived (used/sold within the year)

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