Departmental Pay Structure

CAT 2008 Slot 1 · DILR · Medium · Data Interpretation

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Passage / data set

There are 100 employees in an organization across five departments. The table below gives department-wise distribution.

DepartmentNumber of EmployeesAverage Age (Years)Average Basic Pay (Rs.)Allowances (% of Basic Pay)
HR545500070
Marketing3035600080
Finance2030650060
Business Development3542750075
Maintenance1035550050

Whenever a person is transferred/promoted from a department of lower average age to a department of higher average age, he/she gets an additional allowance of 10% of basic pay. Otherwise no change.

Question 1 of 3

What is the approximate percentage change in the average gross of the HR department due to transfer of a 40-year old person with basic pay of Rs. 8000 from the Marketing department?

  1. A.

    9%

  2. B.

    11%

  3. C.

    13%

  4. D.

    15%

  5. E.

    17%

Answer

C

Explanation

Initial HR average gross =5000×1.7=Rs. 8500= 5000 \times 1.7 = \text{Rs. } 8500. Transferred person basic =8000= 8000. Since Marketing avg age (35) < HR avg age (45), allowance becomes 80%+10%=90%80\% + 10\% = 90\%. Transferred person gross =8000×1.9=Rs. 15200= 8000 \times 1.9 = \text{Rs. } 15200.

New HR total gross =5×8500+15200=42500+15200=57700= 5 \times 8500 + 15200 = 42500 + 15200 = 57700. New HR average gross =577006=9616.67= \frac{57700}{6} = 9616.67. % Change =9616.67−85008500×100≈13.13%≈13%= \frac{9616.67 - 8500}{8500} \times 100 \approx 13.13\% \approx 13\%.

Question 2 of 3

There was a mutual transfer of an employee between Marketing and Finance departments and transfer of one employee from Marketing to HR. As a result, the average age of Finance department increased by one year and that of Marketing department remained the same. What is the new average age of HR department?

  1. A.

    30

  2. B.

    35

  3. C.

    40

  4. D.

    45

  5. E.

    cannot be determined

Answer

C

Explanation

Finance age increase =1  ⟹  = 1 \implies person from Marketing to Finance was 20 years older than person from Finance to Marketing. Cumulative age of Marketing decreases by 20. For Marketing avg age to remain same after transferring 1 person to HR, the person transferred to HR must have age =35−20=15= 35 - 20 = 15. New HR total age =5×45+15=240= 5 \times 45 + 15 = 240. New HR average age =2406=40= \frac{240}{6} = 40 years.

Question 3 of 3

If two employees (each with a basic pay of Rs. 6000) are transferred from Maintenance department to HR department and one person (with a basic pay of Rs. 8000) was transferred from Marketing department to HR department, what will be the percentage change in average basic pay of HR department?

  1. A.

    10.5%

  2. B.

    12.5%

  3. C.

    15%

  4. D.

    30%

  5. E.

    40%

Answer

B

Explanation

Initial HR total basic pay =5×5000=25000= 5 \times 5000 = 25000. Added basic pay =2×6000+10000+8000=20000= 2 \times 6000 + 10000 + 8000 = 20000. New HR total basic pay =25000+20000=45000= 25000 + 20000 = 45000. New HR average basic pay =450008=5625= \frac{45000}{8} = 5625. % Change =5625−50005000×100=12.5%= \frac{5625 - 5000}{5000} \times 100 = 12.5\%.

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