Zahur, a compensation analyst, is explaining the new wage structure to a group of managers. Grade 3 ranges from 201 to 300 points and $6.25 to $7.00. Grade 5 ranges from 401 to 500 points and $7.50 to $8.75. Which of the following statements would be true of Grade 4?
A) 350 points is outside the range of Grade 4.
B) The dollar spread for Grade 4 is less than $.75.
C) The dollar spread for Grade 4 is greater than $1.25.
D) The bottom of Grade 4 is lower than $6.50.
E) The top of Grade 4 is greater than $7.50.

Question

Quizplus · Accepted Answer

Since Grade 3 ranges from 201 to 300 points and Grade 5 ranges from 401 to 500 points, it can be inferred that Grade 4 falls between 301 and 400 points. The dollar spread for Grade 4 can be calculated by subtracting the lowest value ($6.25) from the highest value ($8.75), which gives a spread of $2.50. Dividing this by the range of points (100) gives a dollar amount of $.025 per point. Therefore, the dollar range for Grade 4 would be $7.00 to $7.00 + (100 x $.025) = $9.00. This means that the top of Grade 4 is greater than $7.50, making statement E true.

Zahur, a Compensation Analyst, Is Explaining the New Wage Structure