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	100	121
distribution of wages

(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

\[= \frac{\text{ Total weekly wages} }{\text{ Number of workers} }\]

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

\[CV (\text{ firm }  A) = \frac{10}{52 . 5} \times 100\]
\[ = 19 . 04\]
\[CV (\text{ firm } B) = \frac{11}{47 . 5} \times 100\]
\[ = 23 . 15\]

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