Question

An analysis of monthly 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 wages earners	586	648
Mean of monthly wages	Rs. 5253	Rs. 5253
Variance of distribution of wages	100	100

(i) Which firm A or B pays larger amount as monthly wages ?

(ii) Which firm A or B shows greater variability in individual wages ?

Answer 1

Showing Firm B pays larger amount of monthly wages. 

Proving Firm B shows greater variability.

Detailed Answer :

(i) Number of wage earners in firm A = 586

Mean of Monthly wages of firm A(x₁ ) = 5253

Total Amount paid by firm A = 586 x 5253 = 3078258

Number of wage earners is firm B = 648

Mean of Monthly wages of firm B(x₂ ) = 5253

Total Amount paid by firm B = 648 x 5253 = 3403944

∴ Firm B pays the larger amount as monthly wages as compare to firm A.

(ii) Variance of the distribution of wages in firm A is σ₁² = 100

∴ Standard deviation of the distribution of wages is n firm

Variance of the distribution to wages in firm B(σ²)² = 121

∴ Standard deviation of the distribution of wages in firm

Hence, firm B shows greater variability is individual wages.