An analysis of monthly wages paid to workers in two firms A and B, belonging to the same industry, gives the following results:
Firm AFirm BNo. of wage earners586648Mean of monthly wagesRs.5253Rs.5253Variance of the distribution of wages100121
(i)Which firm spends larger amount as monthly wages?
(ii)Which firm shows greater variability in individual wages?
(i) Firm A: Number of wage earners (n1) = 586
Mean of monthly wages (¯x1) =Rs. 5253
Total money wages = Rs. 5253 × 586 = Rs. 3078258
Team B: Number of wages earners (n2) = 648
Mean of monthly wages (¯x1) = Rs. 5253
Total money wages = 5253 × 648 = Rs. 3403944
So, Firm B spends larger amount as monthly wages.
(ii) Since, both the firms have same mean wages, so the firm with greater variance will have more variability in individual wages. Thus, firm B will have more variability in individual wages.