Question

I run a business. It costs £54,000 a year. Most of the money goes on paying wages. The ratio of wages to other costs is 2 : 1. How much do I spend on wages every year?

Answer 1

2 × 54,000 ÷ (1+2)

£36,000

Explanation:

Total cost of the business = £54,000

wages : other costs = 2 : 1

Total ratio = 2 + 1 = 3

How much do I spend on wages every year?

Amount spent on wages yearly = ratio of wages / total ratio × Total cost of the business

= 2 × 54,000 ÷ (1+2)

= 2/3 × £54,000

= £108,000/3

= £36,000

Amount spent on wages yearly = £36,000