If a woman does home-based production but pays for raw material electricity and packing herself, how should real income be assessed?
Answer and explanation
Correct answer: By subtracting raw material, electricity, packing and other production costs from total payment
Real income is found by deducting all production expenses from the total payment or sales amount. Thus, the amount left after subtracting raw material, electricity, packing and other direct costs is the net or real income. Total sales alone are not income because they include the cost of production. Exam tip: write Net income = Total receipts − Total expenses.
Frequently asked questions
What is the correct answer to this question?
By subtracting raw material, electricity, packing and other production costs from total payment
Why is this the correct answer?
Real income is found by deducting all production expenses from the total payment or sales amount. Thus, the amount left after subtracting raw material, electricity, packing and other direct costs is the net or real income. Total sales alone are not income because they include the cost of production. Exam tip: write Net income = Total receipts − Total expenses.
Which subject and chapter does this question cover?
This is a Class 11 Home Science question. Chapter: Work, Livelihood and Career. Topic: Women and work: issues and concerns.
