A small accounting firm pays each of its seven clerks $60,000, three junior acco

Question

A small accounting firm pays each of its seven clerks $60,000, three junior accountants $80,000 each, and the firm's owner $670,000.

What is the mean salary paid at this firm? (Round your answer to the nearest whole number.)

What is the median salary? The firm gives no raises to the clerks and junior accountants, but the owner is given a new salary of $890,000.

How does this change affect the mean? (Round your answer to the nearest whole number.) The mean increases by $ .

How does it affect the median? The median increases by $ .

Explanation / Answer

Mean salary

= (7*60000 + 3*80000 + 670000)/(7 + 3 + 1)

= 120909

Median salary = 60000

Under new conditions:

Mean salary

= (7*60000 + 3*80000 + 890000)/(7 + 3 + 1)

= 140909

So,

Mean salary increases by 20000.

Median salary = 60000

No effect on median salary i.e. median salary increases by 0

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