The annual incomes of the five vice presidents of Elly's Industries are: $41,000, $38,000, $32,000, $33,000 and $50,000. The annual incomes of Unique, another firm similar to Elly's Industries, were also studied and found to have a mean of $38,900 and a standard deviation of $6,612. Which firm has the greater coefficient of variation?
A) Elly's Industries
B) Unique
C) Both firms have the same coefficient of variation
D) We have not been given sufficient information to determine.

Question

Quizplus · Accepted Answer

To calculate the coefficient of variation, we divide the standard deviation by the mean and multiply by 100%. The standard deviation and mean for Elly's Industries are not given, so we cannot calculate the coefficient of variation for that firm. For Unique, the coefficient of variation is:
CV = (6612/38900) * 100% = 17%
Therefore, since the coefficient of variation for Unique is 17%, and we cannot calculate it for Elly's Industries, we cannot compare the two firms and can only say that the answer is D. However, based on the given information, we can see that the incomes for Elly's Industries have a wider range ($32,000 to $50,000) than the incomes for Unique (ranging from mean - std dev to mean + std dev), indicating that Elly's Industries may have a more variable income distribution.

The Annual Incomes of the Five Vice Presidents of Elly's