Directions : Sarp Infotech Solutions Software Company before selling a package…

Concept: The cost incurred in a given month equals the number of people employed that month multiplied by the cost rate (Rs '000 per month) of whichever project stage is active in that month. When a stage's schedule shifts, the stage active in a given month can change, so its cost rate changes too. Percentage change in cost = ((new cost − original cost) / original cost) × 100.

Application:

1. Original schedule: the fifth month falls in the Coding stage (originally months 5-8), whose rate is Rs 10,000 per person per month. The staffing table lists 4 people employed in month 5, so the original fifth-month cost = 4 × 10,000 = Rs 40,000.

2. Revised schedule: Design overruns into months 3, 4 and 5 (three months instead of two), pushing Coding to start only from month 6. So the fifth month now falls in the Design stage, whose rate is Rs 20,000 per person per month, with 5 people working that month (as given). Revised fifth-month cost = 5 × 20,000 = Rs 1,00,000.

3. Percentage change = ((1,00,000 − 40,000) / 40,000) × 100 = (60,000 / 40,000) × 100 = 150%.

Cross-check: The revised cost is 1,00,000 / 40,000 = 2.5 times the original, i.e., a 150% increase (2.5 − 1 = 1.5 → 150%). This also matches the two individual factors compounding: the per-person rate doubles (10,000 → 20,000, a 100% rise) and headcount rises 25% (4 → 5); combined, 2 × 1.25 = 2.5×, consistent with the 150% net change.

Result: the cost incurred in the fifth month increases by 150%.