From 2 firm a and b belonging to same industry the following details are available faim a number of employees 100 average monthly wages 4800 standard deviation 600 and firm b number of employees 200 average monthly wage 5100 standard deviation 540 find 1.which firms pays amount as wages 2.which firm show greater variability in the distribution of wages 3.find combined average monthly wages and the standard deviation of the wages of all the employees in both the firm
Answers
From 2 firm a and b belonging to same industry the following details are available
Given,
The number of worker on firm A: Na = 100
The average monthly wages on firm A: Aa = 4800
Standard deviation = 600
The number of worker on firm B: Nb = 200
The average monthly wages on firm B: Ab = 5100
Standard deviation = 540
1.which firms pays amount as wages
Wage bill on firm A = Na × Aa = 100 × 4800 = 480000
Wage bill on firm B = Nb × Ab = 200 × 5100 = 1020000
480000 < 1020000
So, the firm B has larger wage bill.
2.which firm show greater variability in the distribution of wages
For firm A
Standard deviation σA = 600
The average monthly wages on firm A: Aa = 4800
The coefficient of variation = σA/Aa = 600/4800 = 0.125
For firm B
Standard deviation σB = 540
The average monthly wages on firm A: Ab = 5100
The coefficient of variation = σB/Ab = 540/5100 = 0.105
Higher the coefficient of variation, higher the variability.
Coefficient of variation of firm A is higher.
3.find combined average monthly wages and the standard deviation of the wages of all the employees in both the firm
The combined average monthly wages
= (4800 + 5100) / (100 + 200) = 9900/300 = 33
The combined standard deviation of the wages
= (600 + 540) / (100 + 200) = 1140/300 = 3.8