Question

An analysis of the weekly wages paid to workers in two firms A and B, belonging to the same industry gives the following results:

	Firm A	Firm B
No. of wage earners	586	648
Average weekly wages	Rs 52.5	Rs. 47.5
Variance of the distribution of wages	100	121

(i) Which firm A or B pays out larger amount as weekly wages?
(ii) Which firm A or B has greater variability in individual wages?

Answer 1

Average weekly wages$=\frac{\mathrm{Total}\mathrm{weekly}\mathrm{wages}}{\mathrm{Number}\mathrm{of}\mathrm{workers}}$
Total weekly wages = (Average weekly wages) (Numbers of workers)
Total weekly wages for firm A = Rs 52.5$\times$586 = Rs 30765
Total weekly wages for firm B = Rs 47.5$\times$648 = Rs 30780
(i) Firm B pays a larger amount as weekly wages.

(ii) SD (firm A) = 10
SD (firm B) = 11

$$\begin{gathered} \mathrm{CV}(\mathrm{firm}\mathrm{A})=\frac{10}{52.5}\times 100 \\ =19.04 \\ \mathrm{CV}(\mathrm{firm}\mathrm{B})=\frac{11}{47.5}\times 100 \\ =23.15 \end{gathered}$$

Since CV of firm B is greater than that of firm A, firm B has greater variability in individual wages.