Bis Math 2nd Quarter

Senior High School
Quarter 2 - Module 2
Prepared by:
Hernono D. Lopez Sr., DM
ST. IGNATIUS TECHNICAL COLLEGE, INC.

ZONE 11, NATIONAL HIGHWAY, POBLACION, TAGOLOAN, MISAMIS ORIENTAL
Legal History
TESDA: Technical-Vocational
St. Ignatius Technical College, Inc. with business address at Zone 11, National
Highway, Barangay Poblacion, Tagoloan, Misamis Oriental, a family owned technical
school for secondary graduates who intend to pursue technical studies on Computer
Technology was granted a juridical personality by the Securities and Exchange
Commission on October 29, 2003 through its Registration No. CN 200322733. The school
started its operation by offering TESDA courses namely: Two Years Diploma in Computer
Technician and Two Years Diploma in Computer Programming. SITC has run these
programs for almost three years before each respective title was changed.
In 2007, TESDA Director General issued a directive that all diploma courses will
be delivered based on the number of hours as determined and prescribed by the technical
school management. Consequently, SITC diploma courses were changed from Diploma
in Computer Technician to Computer Hardware Servicing NC II with 1,800 hours duration
of course delivery. Similarly, Diploma in Computer Programming was changed to
Programming NC IV with 1,800 duration of course delivery. SITC management has
successfully delivered the same computer courses under their new titles until 2011.
Another mandate was released by TESDA Director General in 2011, limiting the
number of hours of delivery of TESDA courses based on TESDA Training Regulations.
With such mandate, Computer Hardware Servicing NC II with 1,800 hours duration of
course delivery was limited to 292 hours only, since that year up to the present. TESDA
ST. IGNATIUS TECHNICAL COLLEGE, INC. NOT FOR SALE i

did not offer any more Programming NC IV because of some stringent requirements of
the program. SITC continue its operation with only one program being offered to students.
In 2015, when the demand for Bookkeeping NC III was rising, SITC management
endeavored to apply with TESDA R10 to offer the course and luckily the Tech- Voc
agency on April 23, 2015 granted a Registration No 201510043033, WTR 2436 for
Bookkeeping NC III 292 hours duration of course delivery. Since May 2015 up to the
present SITC continue teaching Bookkeeping NC III to interested students.
DepEd: Senior High School
In July, 2015 when the Department of Education (DepEd) encouraged the private
school owners to participate in the delivery of the new program of the basic education
which was the senior high curriculum, SITC management endeavored to apply through
DepEd Central Office. After compliance with all the requirements asked by the education
agency submitted through DepEd regional and provincial offices, the school was granted
a Government Permit No. 230, s. 2015 on December 10, 2015 to operate one Academic
Track: Accountancy, Business and Management (ABM), and a Technical -Vocational
Track: ICT- Computer Hardware Servicing NCII effective SY 2016-2017
During SY 2016-2017, while the delivery of two senior high school tracks were
going on, many parents as well as graduating junior high students kept on requesting
SITC management to offer another academic track which was Humanities and Social
Sciences (HUMSS).Consequently, in March 2017, SITC management endeavored to
apply to offer HUMSS for the next SY 2017-2018. Luckily, on May 8, 2017 DepEd, RO-
ST. IGNATIUS TECHNICAL COLLEGE, INC. NOT FOR SALE ii

X, Government Permit No. SHS-P 076, s. 2017, was granted to the school to operate the
aforementioned academic track effective SY 2017-2018.
Again, owing to the persistent demand of many prospective senior high students
for a Technical-Vocational Livelihood Track on Automotive Servicing, SITC management
endeavored to apply for a new permit to deliver Automotive Servicing NC I & NC II. On
July 19, 2019, a DepEd RO-X, Government Permit SHS P-155, s. 2019 was granted to
the school to operate the aforementioned Tech-Voc Track effective SY 2019-2020.
To date, SITC is delivering four tracks: two academics (ABM and HUMSS) and two
Tech-Voc (ICT and Automotive).
ST. IGNATIUS TECHNICAL COLLEGE, INC. NOT FOR SALE iii

Vision, Mission, and Core Values
Vision Statement
St. Ignatius Technical College, Inc. will be a premier private institution in Tagoloan,
Misamis Oriental focusing on a continuing tradition of excellence in a fast-changing world.
Within a conducive and supportive school environment, we provide relevant high–quality
senior high school tracks and technical training and prepare our diverse student body for
future endeavors. As learner-focused education community, SITC maximizes student
learning potential by providing them with specialized knowledge in traditional and
emerging technical areas as well as general knowledge that fosters a life of learning.
Mission Statement
St. Ignatius Technical College, Inc. strives to prepare all students to become
lifelong learners, law-abiding and responsible citizens ready to face the challenges of the
future. In partnership with families, community, government, business, industry, and
educational systems, we will achieve our goals of creating a relevant learning
opportunities for students-both inside and outside the classroom – that help them develop
the knowledge, critical thinking skills, and human behavior needed to succeed in a
technologically advanced world; thus, realizing our value proposition of “Real Learning,
Real Job, Real Life.”
Core Values
To fulfil its mission, St. Ignatius Technical College, Inc. is committed to the
following values:
ST. IGNATIUS TECHNICAL COLLEGE, INC. NOT FOR SALE iv

• Excellence – setting high and challenging standards for teaching, learning and
professional leadership, advocate continuous improvement of programs,
processes and services, and encourage a results-oriented organization to ensure
that our students are well positioned for success in career and technical fields,
and college transfer.
• Respect – embracing diversity and individual differences, respecting others’
contributions, and everyone’s right to learn free of interruption.
• Innovation – embracing enthusiastic pursuit of new ideas and responsible risk-
taking attitude.
• Sustainability – valuing the responsible use of resources to achieve balance
among social, economic and environmental practices.
ST. IGNATIUS TECHNICAL COLLEGE, INC. NOT FOR SALE v

TABLE OF CONTENTS
Page
St. Ignatius Technical College Inc. Legal History i-iii
St. Ignatius Technical College Inc. Vision, Mission and Core Values iv-v
Introduction 1-2
General Instructions 3-4
Lesson 1 Commission and Overrides 4-10
Lesson 2 Employee Compensation: Salary, Wage, Income and Benefits 11-30
Lesson 3 Employee Compensation: Salary, Wage, Income and Benefits 11-30
Lesson 4 Payroll Deductions 31-40
Lesson 5 Business Data: Graphs and Tables 41-51
Lesson 6 Measures of Central Tendency 52-62
Lesson 7 Variability 63-72
Lesson 8 Tests of Significant Difference 73-88
References 89
ST. IGNATIUS TECHNICAL COLLEGE, INC. NOT FOR SALE vi

INTRODUCTION
Congratulations for having completed successfully Module 1 of your subject

Business Mathematics. In Module 2, you will be learning, advanced topics dedicated
solely for business and employment applications. Similarly, you will learn some important
topics on inferential statistics that are applicable to the business world. The knowledge
gained from the selected topics on inferential statistics will enable entrepreneur to
determine the success or failure of his business.
Module 2 is composed of the following lessons:
• Lesson 1 – Commissions and Overrides

• Lesson 2 & 3 – Employee’s Compensation: Salary, Wage, Income, and
Benefits
• Lesson 4 – Payroll Deductions
• Lesson 5 – Business Data: Graphs and Tables
• Lesson 6 -- Measures of Central Tendency
• Lesson 7 – Variability
• Lesson 8 – Tests of Significant Difference
In the Weekly Home Learning Plan that accompanies Module 2, you will see
that for each lesson we have guided you to focus your studies on the items
specified in the Learning Competencies and Learning Tasks to enable you to gain
much knowledge from every lesson of the module. Take your time, but continue
your struggle until you finish with high grades on your subject Business
Mathematics. The knowledge you gained from this subject will be your sharp
weapon when you engage into business in the days to come.
ST. IGNATIUS TECHNICAL COLLEGE, INC. NOT FOR SALE 1

GENERAL INSTRUCTIONS
You are about to start your study on Module 2 for your subject BUSINESS
MATHEMATICS. To get much result from your effort, please observe the following:
1. Select a place in your home that is conducive for learning.
2. Pre-condition yourself before you start reading the lesson.
3. Ensure that you have a scientific calculator at hand always when you start
studying the lessons for Business Mathematics
4. Shut off your smartphone and keep it in your closet.
5. Read your lesson at least three times (3X) to ensure you have understood the
concept and ideas presented in the lesson.
6. Take note of some important points as you continue your study.
7. If you think you have digested the lesson very well, you may now take your
quizzes and assessments.
8. Perform all the Pre-Tests as well as the Practice Exercises and study very well
the sample problems and solutions to increase your math skill.
9. Do not attempt to copy the answer from your lesson. This is a home study
method; you will learn nothing if you cheat as you are just fooling yourself. Study honestly.
10. Follow all the instructions stipulated in each activity and quiz.
11. You are graded based on this grading system:
Written Work- 25%

Performance Tasks- 45%
Quarterly Assessment- 30%
Total - 100%
12. Use whole yellow paper for quizzes and long bond paper for applications. Use
black or blue ball pen only.
13. You are only allowed to contact your subject teacher during the subject
schedule. Only relevant topics will be entertained and treated as an official interaction
between you and the teacher. Personal matters are prohibited.
15. All hard copies of your outputs should be filed in a long white folder with plastic
cover and fastener. This will serve as your portfolio and a requirement for this subject and
will be submitted at the end of the quarter.

16. Submission dates of your learning outputs are as follows:
WEEK DATE & TIME WEEK DATE & TIME
1 November 14, 2022 1 November 15, 2022

8:00 am – 11:00 am 8:00 am – 11:00 am
8:00 am – 11:00 am 8:00 am – 11:00 am
8:00 am – 11:00 am AS 8:00 am – 11:00 am
ABM 4 December 5, 2022 4 December 6, 2022
8:00 am – 11:00 am 8:00 am – 11:00 am
5 December 12, 2022 5 December 13, 2022
8:00 am – 11:00 am 8:00 am – 11:00 am
6 January 4, 2023 6 January 5, 2023
8:00 am – 11:00 am 8:00 am – 11:00 am
WEEK DATE & TIME WEEK DATE & TIME

8:00 am – 11:00 am 8:00 am – 11:00 am
8:00 am – 11:00 am 8:00 am – 11:00 am
HUMSS 8:00 am – 11:00 am ICT 8:00 am – 11:00 am
8:00 am – 11:00 am 8:00 am – 11:00 am
8:00 am – 11:00 am 8:00 am – 11:00 am
6 January 4, 2023 6 January 5, 2023
8:00 am – 11:00 am 8:00 am – 11:00 am
17. Any question on any part of your lesson(s), just call or text this cell number:
09356521692 – Ma’am Jessa B. Manglay

LESSON 1
COMMISSIONS AND OVERRIDES
Learning Competencies
• Illustrate the different types of commissions

• Compute commissions on cash and commission on instalment basis
• Solve problems involving interests and commissions
Lesson Objectives
At the end of this lesson, you are able to:
1. Differentiate commission from override;

2. Compute for commission earned on a particular cash sale;
3. Compute for commission earned on an installment sale; and
4. Solve for gross earning involving salary, commission, and override.
General Instructions
Now that you are holding this module, do the following:

1. Read and follow instructions carefully in each lesson.
2. Take note and record points for clarification.
3. Do the activities to fully understand each lesson.
4. Answer all the given tests and exercises.
5. Use one (1) whole yellow paper for quizzes and long bond paper for applications.
Use black or blue ball pen only.
6. Make sure to indicate your name, grade level, section, date of submission,
complete name of the subject teacher, title of the lesson, quiz, and assessment
number on the answer sheets.

Let’s start:
Plain Commission
Most sales agents earn commissions only. They are not paid any salary. Therefore, they exert their
best effort to increase their sales because the more they sell, the more they earn. Computation of the
commission makes use of the basic formula we learned, P = BR. The commission is the percentage (P),
the sales is the base (B), and the commission rate is the rate (R).
Examples:
1. Carmen Yambao is a sales agent for the High Ace Realty. She is paid based on commission
only. She is given a 2% commission on her sales. For the current month, her sales was ₱1 035
000.00. Her commission (which is also her gross earning) would be:
Commission = ₱1 035 000.00 x 2%
= ₱20 700
2. Jed Montenegro is a car sales agent. He is paid commission only at the rate of 2.5%. For the
current month, he sold two cars totaling ₱1 875 000.00. His commission (gross earnings) would
be:
Commission = ₱1 875 000.00 x 2.5%
= ₱46 875.00
Commission and Salary
Generally, if a person is employed by a firm as a salesman, he or she is given a basic salary in

addition to the commission he or she is given on his or her sales. His or her gross earnings, therefore, are
equal to:
Gross Earnings = Basic Salary + Commission
Using our foregoing example for commission only, and assuming that Carmen Yambao and Jed
Montenegro are employees with basic salary, the gross earnings of Carmen and Jed would be as follows.
1. Carmen Yambao’s gross earnings assuming a basic salary of ₱10 000.00 per month:
Gross Earning = Basic Salary + Commission
= ₱10 000 + ₱1 035 000 x 2%
= ₱10 000 + ₱20 907
= ₱30 907
2. Jed Montenegro’s gross earnings assuming a basic salary of ₱12 500.00 per year month:
Gross Earnings = Basic Salary + Commission
= ₱12 500 + ₱1 875 000 x 2.5%
= ₱12 500 + ₱46 875
= ₱59 375
In certain cases, however, a sales employee that is given a basic salary earns commission on sales
above a certain figure. For example, Eugene Tito is a sales representative earning a basic salary of ₱18
000.00 a month plus 3% commission on his sales exceeding his quota of ₱15 000.00. Assume he made a
total sales of ₱36 000.00 for the current month. Find his gross earnings.

Given: ₱18 000 Basic Salary per month
3% Commission on sales above ₱15 000 (Sales – Quota)
₱36 000 = Total sales
Find: Gross earnings
Solution: Gross earning = Basic Salary + Commission

= ₱18 000 + 3% (Sales – Quota)
= ₱18 000 + 3% (₱36 000 - ₱15 000)
= ₱18 000 + 3% (₱21 000)
= ₱18 000 + ₱630
= ₱18 630
Still in certain cases, a sales employee is paid a basic salary and a graduated commission based
on his sales above quota. For example, Gem Bandivas is paid a basic salary of ₱9 400.00 a month plus
commission on all his sales above her quota of ₱30 000.00 a month according to the following schedule:
1% on her first ₱20 000
2% on next ₱20 000
3% on sales above quota exceeding the foregoing ₱40 000
Compute for her gross earning if she sells a total of ₱75 360.00 for the past month.
Given: Monthly salary = ₱9 400
Sales quota = ₱30 000
Sales = ₱75 360
Commission = see schedule at the preceding page
Find: Gross earnings
Solution: Let us first solve for the commission:
Total sales = ₱75 360
Less quota = 30 000
Sales subject to commission = ₱45 360
First (20 000) x 1% = ₱200.00
Next (20 000) x 2% = 400.00
Balance 5 360 x 3% = 160.80
Total commission = ₱760.80
Add basic salary = 9 400.00
Gross earnings = ₱10 160.80

Overrides
For people who have people under them doing the sales, overrides are given by their companies
in addition to their basic salary. Product managers and sales or marketing managers earn overrides. For
example:
M. Coronilia is a product manager with five sales representatives under him. The company gives
1
him an annual salary of ₱126 000.00; commission of 5% on his own sales; and an override of 2% on his
men’s sales. Find his gross earnings for the month if his total sales is ₱365 500 with his men able to sell a
total of ₱1 548 263 for the month.
Given: Annual salary = ₱126 000
His sales = ₱365 500
His men’s salary = ₱1 548 263
His commission = 5% of his sales

1
His override = % of his men’s sales
2
Find: Gross earnings of M. Coronilia
Solution:
Commission = 5% x his own sales
= 5% x ₱365 500 = ₱18 275.00

1
Override = % x his men’s sales
2
= 0.005 x ₱1 548 263 = 7 741.32
Annual salary
Basic salary = 12
₱126 000
= 12
Gross earning = 10 500.00
= ₱36 516.32
Transportation Allowances and Representative Allowance
In certain cases, managers, and even salespersons are given transportation allowance and/or
representation allowance. Just remember that any allowance given a person is in addition to the basic
salary, commission, and override that he or she is entitled to. Let us take the following example:
Emmanuel Joshua is a marketing manager. He earns a basic salary of ₱12 500.00 per month. He
earns a 3% commission on his own sales and a 1% override on the sales of his men. In addition, he is
granted a transportation/representation allowance of ₱1 000.00 per month. For the current month, his men

made a total sales of ₱250 000.00. Emmanuel Joshua made a total sales of ₱140 000.00. His gross
earnings would be:
Gross earnings = Basic pay + Override + Allowance
= ₱12 500 + 3% x ₱140 000 + ₱1 000
= ₱12 500 + ₱4 200 + ₱1 000
= ₱20 200
Commission on Sales in Installment Basis
What we have so far are commissions on cash basis, that is, for cash sales. If the sales are on
installment basis, companies do not give commission based on sales. Rather, they are given commission
based on collection, that is, payment made by the buyers. Assuming a sale of ₱120 000.00 paid in monthly
installments of ₱10 000.00, the commission is based on the ₱10 000.00 payment made by the buyer.
Therefore, if the commission paid is, say, 3%, the monthly commission would be 3% x ₱10 000 = ₱300.
QUIZ 1
1. Abram is a sales representative receiving an annual salary of ₱180 000.00 plus commission on all
his sales above quota of ₱30 000.00 in accordance with the following schedule.
1
First ₱30 000 above quota - %
2
Next ₱50 000 - 1%
Next ₱70 000 - 2%
Over ₱150 000 - 3%
Compute for his gross earnings if his sales for the month:
a. ₱28 500
b. ₱37 900
c. ₱58 200
d. ₱92 300
2. Jan is a sales manager receiving a monthly salary of ₱18 000.00, a commission on his 5% on his
sales, and a monthly transportation allowance of ₱5 000.00. He is also given an override of 1% on
his men’s sales. For the month of August, Jan sold a total of ₱110 000.00. His men sold a total of
₱380 500.00. Compute for his gross earnings.
Lesson Summary
• Sales agents and brokers are generally paid commissions as incentives for increasing a firm’s
sales. Some of these sales agents or broker are paid solely through commission or what is termed
as plain commission. Their gross earnings would be their total commission.
• Other sales agents and brokers are paid basic pay plus commission. Their gross earnings would
be their basic pay plus their commission.

• Marketing and/or product managers are generally paid overrides on the sales of people under them.
For these people, gross earnings will be their basic pay plus commission plus override.
• In certain cases, managers and salespersons are given transportation allowance and/or
representation allowance. Just remember that any allowance given a person is in addition to the
basic salary, commission, and override that he or she is entitled to.
• If the sales are on installment basis, companies do not give commission based on sales. Rather,
they are given commission based on collection, that is, payment made by buyers.
LESSON 1 ASSESSMENT
1
1. Peter is a broker who earns commission of 3 2 % on all securities sales that he makes. For the past
year, he closed sales totaling ₱928 867. Find the amount of commission he earned for the year.
2. Roger is a sales engineer receiving a basic monthly compensation of ₱13 500.00 and commission
on all sales of 1%. Compute for his gross earnings for the month if he sold ₱124 580.00.
3. Alex is a straight commission salesman. He is given commission on the basis of the following
schedule:
Monthly Sales
Less than ₱50 000 ……………………………….. 1%
₱50 000 – 99 999 ………………………………… 2%
₱100 000 – 149 999 …………………………….. 3%
₱150 000 and above ……………………………. 4%
Compute for his commission assuming his total sales is:
a. ₱75 800
b. ₱49 900
c. ₱151 200
d. ₱123 500
4. Moses is a sales representative receiving an annual salary of ₱130 000.00 plus commission on all
his sales above quota of ₱25 000.00 in accordance with the following schedule:
1
First ₱30 000 above quota - %
2
Next ₱50 000 - 1%
Next ₱70 000 - 2%
Next ₱150 000 - 3%
Compute for his gross earnings if his sales for the month:
a. ₱24 800
b. ₱57 600
c. ₱67 700
d. ₱120 300
5. Engelbert is a Marketing Manager earning an annual salary of ₱150 000, a commission in his own
1 1
sales of 2%, and on override of 2 % on his men’s sales. His men are entitled to 4 4 % commission
on their own sales plus a basic monthly of ₱8 600 and transportation allowance of ₱1 200.

Engelbert is also entitled to transportation and representation allowance of ₱1 500 a month. For
the past month, Engelbert has total sales of ₱385 360 while his men sold as follows:
Homer, ₱254 125 Oliver, ₱128 460
Pacifico, ₱88 194 Edward, ₱99 295
Compute for the gross earnings of Engelbert and each of his men.
6. Matt is a Product Manager earning a semi-monthly salary of ₱5 500.00. He is given commission

of 2.5% on his own sales and an override of 0.5% on his men’s sales. His men are entitled to a
3.75% commission on their own sales and a basic semi-monthly salary of ₱4 000.00. Matt and his
men are given transportation allowance of ₱2 000.00 per month. Compute for the gross earnings
of Matt and each of his men.

LESSONS 2-3
LESSONS 2-3: EMPLOYEE COMPENSATION: Salary, Wage, Income and Benefits

(Duration of study: 2 weeks)
• Define salary, wage, income, and benefits

• Compute gross and net earnings
• Define each of the benefits given to the wage earners.
Lesson Objectives
1. Define employee compensation;

2. Differentiate salary, wage, and income;
3. Solve problems related to piece-rate earners and hourly-paid earners
including overtime pay;
4. Convert annual salaries to monthly, semi-monthly, and weekly salaries;
5. Enumerate and define the different benefits given to an employee;
6. Compute fore overtime pay on:
a. Regular day
b. Special day
c. Rest day
d. Regular holiday
e. Rest day which falls on a regular holiday
7. Compute for gross earnings to include overtime pay and net earnings or pay
considering the different payroll deductions;
8. Distinguish taxable from non-taxable employee benefits; and
9. Use e-spreadsheet in the computation of regular pay, overtime pay, gross
earnings, deductions, and net pay.

5. Use one (1) whole yellow paper for quizzes and long bond paper for
applications. Use black or blue ball pen only.
complete name of the subject teacher, title of the lesson, quiz, and assessment number
on the answer sheets.
Let’s start:
Employee compensation refers to the remuneration given an employee in

exchange of his or her service. This is the legal and moral obligation of any business.
This includes wages, salaries, employee benefits including sick leave and vacation leave,
and incentive pay, which includes productivity pay, commission, override, bonus, and
profit-sharing.
Employment law does not provide a specific definition of a wage or salary earner.
However, generally speaking, the term “wages” is used where the amount of money the
employee receives may vary from one pay period to the next, as the amount paid is
directly dependent on the amount of hours worked; and the term “salary” refers to an
agreed and fixed annual amount of money the employee receives regardless of the hours
worked.
Wages
Basic pay in an employee’s compensation package refers to the wages or salaries

they get. Wages refer to the earnings received by a worker on a piece rate, hourly rate,
or daily rate.
Piece Rate
A worker employed on a “piecework” basis is paid in proportion to the quantity of

work he or she finishes. The rate used can be fixed irrespective of the quantity produced,
in which case it is called a fixed piece-rate plan. On the other hand, it can be graduated,
increasing as the quantity produced increases, in which case it is called differential piece-
work plan.
Examples:
1. Tammy is paid on a per-piece basis at the rate of ₱1.20 per piece. If she
finishes 360 pieces a week, how much is her total earnings?
Given: Rate = ₱1.20 per piece
Quantity produced = 360 pieces (base)
Find: Total earnings
Solution: Total earnings = Quantity x Rate
= 360 x ₱1.20
= ₱432.00
2. Linda is employed to repack and seal pepper. She is paid on the following
differential pay plan schedule:

Daily Rate Daily Rate
Quantity Per 100 Packs Quantity Per 100 Packs
Less than 100 ₱100.00 150 – 199 ₱107.50
100 – 149 ₱105.00 200 or more ₱110.00
For the week, Linda repacked the following quantities: Monday, 95;
Tuesday, 102; Wednesday, 130; Thursday, 152; and Friday, 201. Compute for her
total wage for the week.
Solution:
Quantity x Rate = Amount

100
Monday 95 x ₱100.00/100 = 95 x = 95 x 1 =
100
₱95.00
105 10 710
Tuesday 102 x ₱105.00/100 = 102 x = =
100 100
₱107.10
105 13 650
Wednesday 130 x ₱105.00/100 = 130 x = =
100 100
₱136.50
107.50 16 340
Thursday 152 x ₱107.50/100 = 152 x = =
100 100
₱163.40
110 22 110
Friday 201 x ₱110.00/100 = 201 x = = ₱221.10
100 100
Total
₱723.10
Rake note that dividing by 100, we move the decimal point two places to
the left, so 10 710 becomes 107.10; 13 650 becomes 136.50; 16 340 becomes 163.40;
and 22 110 becomes 221.10.
OR
We can convert the rate on a per-piece basis:
₱100.00/100 pc. = ₱1.00/pc.
₱105.00/100 pc. = ₱1.05/pc.
₱107.50/100 pc. = ₱1.075/pc.

₱110.00/100 pc. = ₱1.10/pc.
Then, we multiply the quantity produced by the piece rate thus obtained:
Monday = 95 x ₱1.00 = ₱95.00
Tuesday = 102 x ₱1.05 = ₱107.10
Wednesday = 130 x ₱1.05 = ₱136.50
Thursday = 152 x ₱1.75 = ₱163.40
Friday = 201 x ₱1.10 = ₱221.10
Total ₱723.10
Hourly Rate
Many employees are paid on an hourly basis. To compute for the pay, we simply
multiply the number of hours of work by the hourly rate. For example, if an employee
worked for 40 hours during the week and his or her rate is ₱10.00 per hour, his or her
wage is 40 hours x ₱10.00/hour = ₱400.00.
Employees who work more than the required number of hours are entitled to
overtime pay. Overtime premium refers to the excess payment over the regular rate. The
following are the different articles of the Labor Code relevant to normal hours and
overtime work.
1. Article 83 of the Labor Code enunciates that the normal hours of work of any
employee shall not exceed eight (8) hours a day. This is exclusive of the one
(1) hour lunch break. Article 85 provides that subject to such regulations as the
Secretary of Labor may prescribe, it shall be the duty of every employer to give
his or her employees not less than sixty (60) minutes time-off for their regular
meals.
2. Article 87 provides that work may be performed beyond (8) hours a day
provided that the employee is paid for the overtime work an additional
compensation equivalent to his regular wage plus at least twenty-five percent
(25%) thereof. Work performed beyond eight hours on a holiday or rest day
shall be paid an additional compensation equivalent to the rate of the first eight
hours on a holiday or rest day plus at least thirty percent (30%) thereof.
3. Article 93 provides that:
a. Where an employee is made or permitted to work on his or her scheduled
rest day, he or she shall be paid an additional compensation of at least thirty
percent (30%) of his or her regular wage. An employee shall be entitled to

such additional compensation for work performed on Sunday only when it
is his or her established rest day.
b. When the nature of the work of the employee is such that he or she has no
regular work days and no regular rest days can be scheduled, he or she
shall be paid an additional compensation of at least thirty percent (30%) of
his or her regular wages for work performed on Sundays and holidays.
c. Work performed on any special holiday shall be paid an additional
compensation of at least thirty percent (30%) of the regular wage of the
employee. Where such holiday work falls on the employee’s scheduled rest
day, he or she shall be entitled to an additional compensation of at least fifty
percent (50%) of his or her regular wage.
d. Where the collective bargaining agreement or other applicable employment
contract stipulates the payment of a higher premium pay than that
prescribed under this Article, the employer shall pay such higher rate.
4. Article 94 provides that:

a. The employer may require an employee to work on any holiday but such
employee shall be paid a compensation equivalent to twice his regular rate.
b. Work on a rest day which falls on a special day shall be paid 150% of regular
hourly rate.
c. Work on a regular holiday shall be paid 200% of regular hourly rate.
d. Work on a rest day which falls on a regular holiday shall be paid 260% of
regular hourly rate.
Computation of Overtime Pay
Assuming that the minimum daily wage rate is ₱340.00, how much is the overtime
rate per hour?
On Ordinary Day
On an ordinary day, the overtime rate per hour is determined as follows:
• First, compute the hourly rate of the employee:

Regular hourly rate = Daily wage rate ÷ 8 hours
= ₱340.00 ÷ 8 hours
= ₱42.50 per hour
• Now, to determine overtime rate per hour:
Overtime rate = Regular hourly rate + 25% of Regular hourly rate
Overtime rate = ₱42.50 + (25% of ₱42.50) = ₱42.50 + ₱10.625 = ₱53.125
The overtime premium is therefore:
Overtime premium = ₱42.50 x 25% = ₱10.625
The Overtime rate = Regular rate + Overtime premium
Overtime rate = ₱42.50 + ₱10.625 = ₱53.125
Alternatively, the overtime would be:
Overtime rate = ₱42.50 x 125% = ₱53.125
Example: Myrna earns the regular daily rate of ₱340.00 giving her
an hourly rate of ₱42.50. If she works 10 hours on a regular day, her
pay would be:
Total pay for the day = Regular day + Overtime pay
= ₱42.50 x 8 hours + (₱42.50 x 125% x 2 hours)
= ₱340.00 + ₱106.25
= ₱446.25
On Rest Day and Special Day
Employees generally have their rest days, which may not fall on a Sunday. If an
employee is made to work on a Sunday, his or her rest day could be Monday or any other
day of the week to compensate for the Sunday that he or she worked. If an employee is
made to work on his or her rest day or an a special holiday like Maundy Thursday or Good
Friday, which dates are not fixed, the computation of his or her pay would be as follows:
Compute the hourly rate of the employee on a rest day or special day. The hourly
rate on rest day and special days is 130% of the regular rates:
Hourly rate = 130% of Regular hourly rate

(on rest day = 130% x ₱42.50 = ₱55.25 per
hour
or special day)
To determine overtime rate per hour:
Overtime rate = Hourly rate on rest day + 30% Hourly rate on rest day
= ₱55.25 + (30% of ₱55.25)
= ₱55.25 + ₱16.575
= ₱71.825
Alternatively, the overtime rate per hour would be:
Overtime rate = Hourly rate on rest day x 130%
= ₱55.25 x 130% = ₱71.285

Example: Linda earns the regular daily rate of ₱340.00 giving her an hourly
rate of ₱42.50. She was requested by her boss to work on a Saturday, her
rest day.
a. She worked for 8 hours.

Total pay for the day = 8 hours x (₱42.50 x 130%)
= 8 x (₱55.25)
= ₱442.00
b. She worked for 10 hours.
Total pay for the day = [(8 hours x Hourly rate on rest day) + (2 hours x
Hourly
rate on rest day x 130%)]
= [(8 x ₱55.25) + (2 x ₱55.25 x 130%)]
= ₱442.00 + (2 x ₱71.825)
= ₱585.65
On Rest Day which Falls on a Special Day
Compute the hourly rate of the employee on a rest day which falls on a special
day:

(on rest day = 150% x ₱42.50 = ₱63.75
which falls on
a special day)
Overtime rate = Hourly rate on rest day + 30% of Hourly rate on rest day
= ₱63.75 + (30% of ₱63.75) = ₱63.75 + ₱19.125 = ₱82.875
Alternatively,
Overtime rate = Hourly rate on rest day x 130%
= ₱63.75 x 130% = ₱82.875

Example: Zenaida earns the regular daily rate of ₱340.00 giving her an hourly rate of
₱42.50. She was requested by her boss to work on her rest day, which falls on Maundy
Thursday.
a. She worked for 8 hours. Her total pay for the day would be:
Total pay for the day = 8 hours x Regular hourly rate x 150%
=8 x (₱42.50 x 150%)
=8 x ₱63.75
= ₱510.00
b. She worked for 10 hours. Her total pay for the day would be:
Total pay for the day = [8 hr. x (₱42.50 x 150%)] + (2 hr. x [(₱42.50 x 150%) x
130%)]
= 8 hr. x ₱63.75 + 2 hr. x (₱63.75 x 130%)
= ₱510 + (2 x ₱82.875)
= ₱510 + ₱165.75
= ₱675.75
On a Regular Holiday
Compute for the hourly rate on regular holiday:

(on regular holiday) = 200% x ₱42.50
= ₱85.00 per hour
Overtime rate = Hourly rate on regular holiday x 130%
= ₱85.00 + (30% of ₱85.00)
= ₱85.00 + ₱25.50
= ₱110.50
Alternatively,
Overtime rate = Hourly rate on regular holiday x 130%
= ₱85.00 x 130%
= ₱110.50

Example: Ester earns the regular daily rate of ₱340.00 giving her an hourly rate of ₱42.50.
She was requested by her boss to work on May 1, Labor Day.
a. She worked for 8 hours. Her total pay for the day would be:
Total pay for the day = 8 hours x 200% of Regular hourly rate
= 8 x 200% x ₱42.50
= 8 x ₱85.00
= ₱680.00
Total pay for the day = [(8 hours x 200% of Regular hourly rate + {2 hours x (200%
of
Regular hourly rate x 130%)}]
= (8 x ₱42.50 x 200%) + {2 x (₱42.50 x 200% x 130%)}]
= (8 x ₱85.00) + (2 x ₱110.50)
= ₱680.00 + ₱221.00
= ₱901.00
On a Rest Day which Falls on a Regular Holiday
Compute for the hourly rate:
Hourly rate = 260% of Regular hourly rate (on a rest day which falls on a regular
holiday)
= 260% x ₱42.50
= ₱110.50
Overtime rate = Hourly rate on rest day + 30% of Hourly rate which falls on a
regular
holiday
= ₱110.50 + (30% of ₱110.50)
= ₱110.50 + ₱33.15
= ₱143.65
Alternatively,
Overtime rate = Hourly rate on rest day which falls on regular holiday x 130%
= ₱110.50 x 130%

= ₱143.65
Example: Teresita earns the regular daily rate of ₱340.00 giving her an hourly rate
of ₱42.50. She was requested by her boss to work on December 30, Rizal Day,
which is a regular holiday. However, Rizal Day fell on a Monday, which was
Teresita’s rest day.
a. Teresita worked for eight hours. Her total pay for the day would be:
Total pay for the day = 8 hours x Regular hourly rate x 260%
= 8 x ₱42.50 x 260%
= ₱884
Total pay for the day = [(8 hours x Regular hourly rate x 260%) +(2 hours
x
{Regular hourly rate x 260%} x 130%]
= (8 x ₱110.50) + (2 x ₱143.65)
= ₱884.00 + ₱287.30
= ₱1 171.30
For the following exercises and assignments, the premiums therein stated are
theoretical and strictly used for problem-solving purposes and may not follow rates set by
law. In practice, companies may pay more than what is prescribed by law, but never below
the same.
Examples:
1. Joselito is paid on an hourly basis. Forty hours a week is considered his regular
hours and anything in excess is considered overtime. His regular rate is ₱15.00
per hour and he is paid 25% premium on overtime. He worked for the following
hours for the past week:
Monday - 8 hours Thursday - 10 hours
Tuesday - 4 hours Friday - 8 hours
Wednesday - 8 hours
Required: Compute for his gross earnings using the formula: Gross earnings
= Number of hours worked x Hourly rate.
Solution: Inasmuch as Joselito is paid overtime on time in excess of 40 hours,

we have to add all hours worked during the week:
Monday -8

Tuesday -4
Wednesday - 8
Thursday - 10
Friday -8
Total 38 hours, therefore he has overtime
x ₱15/hour
Gross earnings ₱570.00
2. Assuming that instead of 8 hours for Wednesday and Friday, Joselito worked
10 hours for those days. To get the total hours worked, we add 8 + 4 + 10 + 10
+ 10 to get 42.
Gross earnings = Regular pay + Overtime pay
= (Regular hours x Hourly rate) + (Overtime hours x Overtime

rate)
Overtime pay = Overtime hours x Regular hourly rate x Overtime premium
OR
Overtime rate = Regular hourly rate x Overtime premium
Overtime pay = Overtime hours x Overtime rate (obtained above)
Therefore, Joselito will be paid as follows:
Total hours worked 42 hours
Regular hours 40 hours x ₱15 = ₱600.00
Overtime hours 2 hours x ₱15 x 1.25 = ₱ 37.50
Total pay ₱637.50
OR
We can multiply the regular rate by the premium, hence, ₱15 x 1.25 =
₱18.75. ₱18.75 is, therefore, the employee’s overtime rate. Therefore, to
compute for total pay,

Regular pay = 40 hours x ₱15.00 = ₱ 600.00
Overtime pay = 2 hours x ₱18.75 = 37.50
Total pay = ₱637.50
3. In example (1), if Joselito is paid overtime on all hours in excess of 8 hours per
day, how much is his gross earnings?
Joselito only worked more than 8 hours on Thursday (10 hours).
Solution: Regular earnings = (8 + 4 + 8 + 8 + 8) ₱15.00
= 36 hours x ₱15.00
= ₱540.00
Overtime earnings = 10 – 8 = 2 hours x ₱15 x 1.25 = ₱37.50
Total earnings = Regular earnings + Overtime earnings
= ₱540.00 + ₱37.50
= ₱577.50
Note: Joselito is entitled to overtime (OT) pay on the 2 hours excess he worked
on Thursday (10 hours – 8 hours).
To find his overtime rate, we simply multiply his regular by 1.25, thus,
₱15.00 x 1.25 = ₱18.75.
To use this, we compute for
Regular earnings = 36 hours x ₱15.00 = ₱540.00
Overtime earnings = 2 hours x ₱18.75 = 37.50
Total earnings = 38 hours = ₱577.50
Salary
Earnings of employees paid on a monthly or annual basis is generally referred to

as salary. It is, sometimes, necessary to convert salaries on annual basis into monthly
basis, weekly to monthly, monthly to semi-monthly, etc. in these cases, we should always
remember that:
1 year = 12 months = 24 semi-monthly = 6 bi-monthly
1 year = 52 weeks = 26 bi-weekly
1 month = 2 semi-monthly
2
semi-monthly = every month
5
bi-monthly = every two months
bi-weekly = every two weeks

1
Take note that the prefix “semi” means 2, while the prefix “bi” means twice. It is,
likewise, important to note that a month is not equal to 4 weeks. If it were, then there
would only be 48 weeks in a year, which is not the case. There are 52 weeks in a years,
not 48. Hence, to convert monthly salary into weekly salary, we have to convert the
monthly into annual salary first and then divide by 52.
Let us study the following conversions, assuming an annual salary of ₱72 000:
Annual salary ₱72 000
1. Monthly salary = = = ₱6 000
12 12
2. Semi-monthly salary = = = ₱3 000
24 24
OR
3. Weekly salary = = = ₱1 348.62
52 26
4. Bi-weekly salary = 26
= 26
= ₱2 769.23
OR
= Weekly salary x 2 = ₱1 348.62 x 2
= ₱2 769.24*
To convert monthly salary into hourly rate, we first determine the number of regular
hours in a workweek. Some companies have 40-hour workweek while others have 48-
hour workweek.
If the regular week load is 40 hours,

Weekly rate
Hourly rate = 40 hours

Weekly rate
In our example, if the regular week load is 40 hours,

Weekly rate
Hourly rate =
40 hours
₱1 384.62
= = ₱34.6155 = ₱34.62
40

Weekly rate
₱1 384.62
= = ₱28.84625 = ₱28.85
48

Income
Income is a broader term than wages or salary. Wages and salaries are income to
the persons receiving it. However, for people who are not employees, their income may
not be in the form of wages or salaries. They can have their commission income if they
are paid for the commission on sales they make, rental income if they have properties
they rent out, dividend income if they are stockholders, royalties if they are authors, and
other income for whatever endeavor they engage in including profit-making business. A
business firm’s income is in the form of profits that the business earns that we have
studied in the preceding chapter.
Examples:
1. Janine is a stockholder of the Wisdom Corporation. For the current year, the
corporation declared 10% cash dividend to stockholders. Janine owns 1 000
shares of the company’s ₱10.00 par value shares. To compute for her dividend
income, Janine’s dividend income = No. of shares x Par value x Dividend rate
= 1 000 shares x ₱10.00 x 10% = ₱1 000
2. John Abram is an author and his book sold 10 000 copies for the first semester.
His book sells at ₱375 per copy. He receives a 22% royalty from his publisher.
His royalty income would be:
John Abram’s royalty = 2 500 x ₱375 x 22% = ₱206 250
Employee Benefits
Employee benefits cover remuneration other than basic pay. It includes vacation
and sick leaves, medical and hospitalization benefits, meal allowance, transportation
allowance, clothing allowance, etc., and incentive pay for the productivity such as
commission, overrides, bonuses, and profit-sharing. For the Philippines, the following
benefits are given to employees:
• Vacation pay: Thirteen (13) vacation days, with additional one vacation day every
year starting on second year of service and convertible to cash at the end of each
year. Maximum total vacation leave is 18 days.
• Sick leave: Twelve (12) days per year for the first two years of service. With
additional one sick leave every year starting on second year of service. Maximum
total sick leave is 15 days. All unused leave days are convertible to cash in
December of each year.
• Holiday pay: (Please see Appendix F for the list of Philippine Holidays for 2016.)
In lieu of vacation pay, Article 95 of the Labor Code provides for service incentive
leave for every employee who has rendered at least one year of service of 5 days with
pay.

Some benefits are taxable, just like wages, salaries, commission, royalties, etc.
However, some benefits are non-taxable. Revenue Regulations (RR) No. 5-2011 dates
March 16, 2011 published in Manila Bulletin March 18, 2011 cites the non-taxable benefits
as follows:
The BIR issued Revenue Regulations No. 5-2011 limiting the items of ‘de minimis’
benefits that are exempt from withholding tax on compensation (WTC) or to Fringe
Benefits Tax (FBT) to the following:
1. Monetized unused vacation leave credits of private employees not exceeding 10

days;
2. Monetized value of vacation and sick leave credits paid to government employees;
3. Medical cash allowance to dependents of employees, not exceeding ₱750.00 per
employee per semester of ₱125.00 per month;
4. Rice Subsidy of ₱1 500.00 or one (1) sack of 50m kg of rice per month amounting
to not more than ₱1 500.00;
5. Uniform and clothing allowance not exceeding ₱4 000.00 per annum;
6. Actual medical expenses not exceeding ₱10 000.00 per annum;
7. Laundry allowance not exceeding ₱300.00 per month;
8. Annual achievement award with an annual monetary value not exceeding ₱10
000.00;
9. Gifts during Christmas and major anniversaries not exceeding ₱5 000.00 per
annum; and
10. Daily meal allowance for overtime work and night shift not exceeding 25% of the
basic minimum wage.
RR 5-2011 emphasized that other than the above benefits, all other benefits given
by employers to employees shall not be considered “de minimis” benefits, and
hence, shall be subject to income tax as well as withholding tax on compensation
or fringe benefits tax.
QUIZ 2
1. Carmen is a worker in a textile firm. She is paid a regular hourly rate of ₱12.00.
She is paid “time-and-a-half=” for regular overtime (overtime done on regular
days) and “double-time” for overtime done on Sundays and holidays. The firm
has regular working days from Monday to Saturday. Carmen worked for the
following hours of the week:
Monday - 8 hours Thursday - 4 hours

Tuesday - 10 hours Friday - 10 hours
Wednesday - 12 hours Saturday - 8 hours
Sunday - 4 hours

Find her gross earnings.
2. In the above example (1), assume that the company considers overtime any
hours worked over 40 hours in a week. Let us recomputed Carmen’s earnings.
Lesson Summary
• Employee compensation refers to the remuneration given an employee in

exchange of his or her services. This can be in the form of a wage, a salary,
employee benefits including sick leave and vacation leave, and incentive pay,
which includes productivity pay, commission, override, bonus, and profit-sharing.
• Basic pay in an employee’s compensation package refers to the wages or salaries
that they get.
• Wages refers to earnings received by worker on a piece rate, hourly rate, or daily
rate.
• Employees who work more than the required number of hours are entitled to
overtime pay. Overtime premium could be 25% or 50% or any rate more than 25%
as per company policy.
• Earnings of employees paid on monthly or annual basis are generally referred to
as salary.
• Income is broader term than wages or salary. Wages and salaries are income to
the people receiving them. Income includes dividend income to stockholders,
royalty to authors, rent income to those owning properties for rent, etc.
• Employee benefits cover remuneration other than basic pay. These include
vacation and sick leaves, medical and hospitalization benefits, meal allowance,
transportation allowance, clothing allowance, and incentive pay for productivity
such as commission, overrides, bonuses, and profit-sharing.

LESSON 2-3 ASSESSMENT 1
1. Compute the gross earning of the following piece-work employees. Check your
work using Excel.
Quantity Produced Pay Plan Total Earnings
a. 3 125 ₱0.25 per piece
b. 1 034 ₱0.275 per piece
c. 125 ₱1.05 for first 100,
₱1.15 for all others
d. 250 ₱0.50 for first 100,
₱0.65 for next 100,
₱0.80 in excess of 200
e. 86 First 20 - ₱0.30
21 – 30 -
0.32
31 – 40 - 0.35
41 – 50 -
0.39
51 – 60 -
0.44
61 – 70 - 0.50
Above 70 - 0.57
2. Find the gross weekly wage of the following employees. Check your work using
Excel.
Employees Production Piece Rate Gross Earnings
a. F. Morato 105 ₱0.30
b. A. Obidos 75 ₱2.50
c. I. Reyes 236 ₱1.15
d. T. Abad 25 ₱10.50
e. H. Lopez 6 ₱25.00
3. Rociano has a total production of 625 pieces. Find his gross earnings under the
following piece-rate plan:
a. ₱0.98 per piece
b. ₱1.1125 for the first 200 pieces
₱1.535 for the next 200 pieces
₱1.80 for all others
c. Less than 200 at ₱0.95/pc.
200 – 300 at ₱0.98/pc.
301 – 400 at ₱1.00/pc.
401 – 500 at ₱1.05/pc.

Over 500 at ₱1.15/pc.
4. Carissa, Erika, Mervin, and Rhogel are working in a factory producing different
products and are paid on a per-piece basis weekly. Following are their production
for the week:
Quantity Rate/100 pc.
Carissa 230 ₱120
Erika 175 ₱150
Mervin 219 ₱108
Rhogel 189 ₱115
Compute their individual earnings by:
a. Direct multiplication method

b. Converting the rate per 100 pc. into a per-piece basis
c. Using Excel
LESSON 2-3 ASSESSMENT 2-3
1. Complete the following payroll summary. Assume that time in excess of 40

hours is paid OT premium of 25%:
Hourly Earnings
Employee Rate M T W Th F Reg. OT Gross
1 1
A ₱10.50 8 8 7 10 10
2 2
B ₱11.25 8 8 4 12 12
C ₱12.75 - 10 10 10 8
a) Place your computation on a yellow legal pad paper.
b) Use excel.
2. Using date in (1) above, compute for the gross earnings of A, B, and C assuming that
overtime is paid for time in excess of 8 hours a day.
a) Place your computation on a yellow legal pad paper.
b) Use Excel.

Employee Regular Earnings Overtime Earnings Gross Earnings
A
B
C
3. E. Razon is waiter at the Kalye Fiesta. His rest day is Wednesday. He is paid overtime
in excess of 40 hours a week. His hourly rate is ₱13.75. For the week, he worked for
1
50 hours, excluding the 5 2 hours he rendered on Wednesday. His regular overtime
premium is 25% and his holiday overtime premium is 100%. Compute his gross
earnings.
4. C. Estefanio is paid on an hourly basis. The company allows employees 15-minute

grace period in the morning. Office time begins at 8:00 a.m. and ends at 5:00 p.m.
with one-hour lunch break and 15 minutes coffee break each in the morning and in
the afternoon. An employee made who comes after the 15-minte grace period forfeits
the same and deductions are made from his or her wage according to the schedule
given below. An overtime premium of 25% is given for regular overtime; 50% for
Saturday work; and double-time for Sundays and holidays. C. Estefanio’s hourly rate
is ₱12.25.
1
16 minutes - hour deduction
4
1
17 – 30 minutes - hour deduction
2
3
31 – 45 minutes - hour deduction
4
46 – 60 minutes - 1 hour deduction
C. Estefanio’s time card showed the following:
In Out In Out
Monday 8:01 12:00 1:05 7:00
Tuesday 8:17 12:02 1:02 7:30
Wednesday 8:45 12:05 1:00 5:00
Thursday 9:00 12:00 1:00 6:30
Friday 8:24 12:01 12:59 5:01
Saturday 8:00 12:00

Compute for C. Estefanio’s earnings.
5. Vida M. works for a company that pays for hours worked over 48 in a week. For regular
overtime (hours over 48 in a week), the company pays time and a half. For overtime
on Sundays and holidays, the company pays double-time. Compute for Vida M.’s
earnings for the week detailing her regular pay, her regular overtime pay, and her
Sunday/holiday pay given the following:
Monday 8 hours
Tuesday 10 hours
Wednesday 12 hours
Thursday 8.5 hours
Friday 10.5 hours
Saturday 5 hours
Sunday 5 hours
Vida M. is paid ₱18.00/hour.

LESSON 4
PAYROLL DEDUCTIONS
• Distinguish taxable from non-taxable benefits

• Enumerate the standard deductions with the corresponding computations
• Solve problems involving overtime pay
Lesson Objectives
1. Identify the different payroll deductions;

2. Compute for the different standard payroll deductions;
3. Compute for net pay;
4. Prepare a salary graph; and
5. Use Excel to compute for gross earnings and net pay.


Let’s start:
An employee generally does not receive his or her gross earnings intact every
payday. There are certain deductions from gross earnings to arrive at or compute for an
employee’s net pay or take-home pay. These deductions may include, among others, the
following:
1. Employee’s SSS contribution for private employees

2. Employee’s GSIS contribution for government employees
3. PhilHealth contribution for all employees
4. Withholding taxes for all employees
5. Salary advances or temporary vales (IOUs)
6. Union dues
Rate of Contributions to SSS
All employees of private enterprises are covered by the Social Security Service.
Self-employed individuals can also become members. The monthly contributions are
based on the compensation of members. The current SSS contribution rate is 11% of the
monthly salary credit not exceeding ₱16 000.00 and this is being shared by the employer
(7.37%) and the employee (3.63%). The table of SSS contributions is in Appendix C.
Self-employed and voluntary member pays 11% of the monthly salary credit (MSC)
based on the monthly earnings declared at the time of registration. For OFWs, the
minimum monthly salary credit is pegged at ₱5 000.00. For the non-working spouse, the
contribution will be based on 50% of the working spouses last posted monthly salary
credit but in no case shall it be lower than ₱1 000.00.
Rate of Contributions to Phil Health
All employees, whether of private entities or government entities, are to be

members of PhilHealth. This is basically intended to cover them and their beneficiaries
help in times of sickness. Appendix D shows the PhilHealth contributions of employers
and employees. The first in the list shows:
Salary Bracket Salary Total Mo. Employee Employer

Base Premium
1. 8 999.99** and 8 000.00 200.00 100.00 100.00
below
2. 9 000.00 – 9 999.99 9 000.00 225.00 112.50 112.50
3. 10 000.00 – 10 10 000.00 250.00 125.00 125.00

999.99
*Employee share represents half of the total monthly premium while the other half is
shouldered by the employer.
** For a Kasambahay helper receiving a wage of less than Five Thousand Pesos (₱5
000.00) per month, the employer will shoulder both the employee and employers’ share
based on the premium schedule.
Rate of Contribution to GSIS
All government employees holding permanent and non-permanent positions are

members of the GSIS. Premium contributions are based on monthly compensation.
There are two types of insurance coverage.
1. Regular – refers to compulsory premium payments on life insurance and

retirement benefits.
2. Employees Compensation Fund – refers to premium payments paid by your
government agency so you get full coverage in case of a work-related accident
Rate of premium contributions are as follows:

Types of Personal Personal Government Government
insurance Share Share Share Share
coverage
Life Retirement Life Retirement
Regular 2% 7% 2% 10%
Employees none 0% none 1% not to
Compensation exceed ₱100
Fund
Withholding Taxes
Withholding tax on compensation is the tax withheld from income payments to

individuals arising from an employer-employee relationship. Withholding tax table is also
available from the BIR and in the Internet. See Appendix E of this book.
How to Compute Your Philippine BIR Withholding Tax
To be able to compute your BIR Withholding Tax for the month, the following
information are needed. You may want to check out your pay slips for the other
information.
• Your BIR Tax Status (Single/Married)

• Do you have any dependents and how many?
• How much is your SSS/PhilHealth and PagIbig contributions?
• Allowances and other benefits (if any)
Let us assume the following:
• Basic Salary: ₱15 000.00

• Status: Single (no dependent)
• Overtime Pay: ₱2 500.00
• Late/Undertime deduction: ₱500.00
• SSS Contribution: ₱500.00
• PhilHealth Contribution: ₱250.00
• Pag-ibig Contribution: ₱100.00
To get your taxable income, add the following: basic salary and overtime pay then
deduct the late/undertime deduction, SSS, PhilHealth, and Pag-Ibig Contributions.
Your taxable income for the month is ₱16 150.
That would be the result of ₱15 000 + ₱2 500 - ₱500 - ₱500 - ₱250 - ₱100.
Your tax will be computed based on your taxable income. The tax can be computed
with the help of the BIR Withholding Tax Table.
Using the BIR Withholding Tax Table, look for the nearest amount to your taxable
income which is ₱16 150. Look under the monthly category.
In this case, the nearest value is the ₱15 833. Take note of the tax rates above and
the amount above it. Now, we got three important factors in computing your BIR
Withholding Tax Table: ₱15 833, ₱1 875, and lastly the +25% over.
The tax computation would be:
₱16 150.00 (Taxable Income) - ₱15 833.00 (Tax Base) = ₱317.00
₱317.00 x 25% = ₱79.25
₱79.25 + ₱1 875.00 = ₱1 94.25 your BIR Withholding Tax for the month

Pag-Ibig Fund Contributions
The Home Development Mutual Fund (HDMF), more popularly known as the Pag-
Ibig Fund, was established to provide a national savings program and affordable shelter
financing for the Filipino workers. The Fund offers its members short-term loans and
access to housing programs. It is mandatory for all SSS- and GSIS-covered employees;
uniformed members of the AFP, BFP, BJMP, and PNP; as well as Filipinos employed by
foreign-based employers. With the signing of Republic Act No. 9679, membership to the
Fund shall be mandatory for the following:
a. All employees, workers, professionals, officers, and companies who are

compulsory covered by the SSS and GSIS;
b. Uniformed members of the Armed Forces of the Philippines, the Bureau of Fire
Protection, the Bureau of Jail Management and Penology, and the Philippine
National Police;
c. Overseas Filipino Workers (OFWs); and
d. Filipinos employed by foreign-based employers, whether deployed locally
The monthly contribution is shown below:
Percentage of Monthly Compensation

Monthly
Compensation Employee Share Employer Share
₱1 500 and below 1% 2%
Over ₱1 500 2% 2%
Therefore, a person who earns ₱12 000.00 per month will contribute 2% of such
salary or ₱240.00 to the Pag-Ibig Fund.
How to Compute for Net Pay
To compute for NET PAY:
Net Pay = Gross earnings – Deductions
Example: Joy receives a basic pay of ₱8 500.00 a month and a 1% commission on her
sales. She sold ₱65 000.00 for the month. Her deductions are: 4% for SSS based on her
basic monthly pay; ₱100.00 for PhilHealth; Pag-Ibig, 2%; and 10% Withholding Tax based
on gross earnings. Compute for her net pay.
Solution: Step one. Compute for her gross earnings.
Gross earnings = Monthly pay + Commission
= ₱8 500 + 1% (65 000)

= ₱8 500 + ₱650
= ₱9 150
Step two. Compute for her deductions.
SSS = 4% x Basic monthly pay
= 4% (₱8 500) = ₱340
PhilHealth = ₱100 (given)
Pag-Ibig = 2% x ₱9 150 = ₱183
Withholding tax = 10% x Gross earnings
= 10% x ₱9 150 = ₱915
Step three. Compute for her net pay.
Net pay = Gross earnings – Deductions
= ₱9 150 – (SSS + Medicare + WTax)
= ₱9 150 – (₱340 + ₱100 + ₱183 + ₱915)
= ₱9 150 - ₱1 538
= ₱7 612
There are tables to facilitate computation of SSS contribution, GSIS contributions,

PhilHealth contributions, and Withholding taxes as shown in our previous discussion and
which are in the appendices of his book. Withholding taxes are based not only on gross
earnings of employees but also on their civil status (single, married, head of the family)
as well. SSS, GSIS, and Medicare contributions are based on salary brackets of
employees.
Salary Graph
We can graphically resent details of a person’s gross earnings. This is best shown
using a pie graph. We simply have to compute the corresponding percent of the
deductions and the net pay with the gross earnings representing 100%. For our example
above regarding Joy’s earnings, let us summarize the data:

Gross earnings ₱9 150 (100%)
SSS ₱340 (4%)
PhilHealth ₱100 (1%)
Pag-Ibig ₱183 (2%)
Withholding tax ₱915 (10%) (1.538)(17%)
Ney pay/earnings ₱7 612 (83%)
PhilHealth
Pag-Ibig
W Tax
Net Pay
SSS
QUIZ 4
1. Find the gross earnings of each of the following employees using Excel:
No. of Article Total Piece Gross
Employee M T W Th F Articles Rate Earnings
Aireen 26 13 22 25 30 _______ ₱2.05
_______
Beverly 18 28 25 19 22 _______ ₱3.98
_______
Catherine 9 12 15 8 10 _______ ₱10.75
_______
David 110 95 97 122 112 _______ ₱0.97
_______
2. Michaela receives a monthly salary of ₱28 500.00. Compute for her:
a. Annual salary d. semi-monthly salary
b. Weekly salary e. bi-weekly salary
c. Daily rate for 5-day week f. hourly rate for 40-hour week
Lesson Summary
• The take-home pay of an employee is his or her gross earnings less certain payroll
deductions.
• The monthly contributions are based on the compensation of members. The
current SSS contribution rate is 11% of the monthly salary credit not exceeding
₱16 000 and this is being shared by the employer (7.37%) and the employee
(3.63%).
• PhilHealth contributions are intended for employees and their beneficiaries should
they have problems with their health. Employee share represents half of the total
monthly premium while the other half is shouldered by the employer. For
kasambahay or helper receiving a wage of less than five thousand pesos (₱5
000.00) per month, the employer will shoulder both the employee and employer
share based on the premium schedule.
• All government employees holding permanent and non-permanent positions are
members of the GSIS. Premium contributions are based on monthly
compensation.
• Withholding tax on compensation is the tax withheld from income payments to
individuals arising from an employer-employee relationship. Withholding Tax table
is also available from the BIR and in the Internet.
• With the signing of Republic Act No. 9679, membership to the fund shall be
mandatory.
LESSON 4 ASSESSMENTS
1. Myra is paid based on the number of pages she types. She is paid ₱5.00 per page
plus free meals. For the week, she typed 375 pages. The week being the last week
of the month, deductions are made from an employee’s gross earnings equivalent
to 4% of monthly earnings for SSS, ₱10.50 for Medicare, and 2% of monthly
earnings for Withholding tax. Myra had an advance which she is paying at the rate
of ₱5.00 per week. Myra’s earnings for the current month including the current
week is ₱8 000.00. Compute for Myra’s take-home pay.
2. Find the gross earnings of each of the following employees using Excel:
No. of Article Total Piece Gross
Employee M T W Th F Articles Rate Earnings

A 18 20 19 21 23 _______ ₱1.98
_______
B 25 21 23 22 19 _______ 0.991⁄2
_______
C 7 8 10 9 6 _______ 12.75
_______
D 108 95 99 112 102 _______ 0.67
_______
3. Esperanza is paid on a daily basis. She is paid ₱312.00 a day plus commission of
1.5% on all her sales. Her total sales for the month are ₱38 235.00. She worked
1 1
for a total of 24 days. Monthly deductions are 4 2% of the total monthly pay for
2
SSS, ₱75.00 for Medicare, and 3% of total monthly pay for Withholding tax. Union
dues every month is ₱20.00. Compute for her net pay.
4. Helen receives a monthly salary of ₱18 800.00. Compute for her:
a. Annual salary d. semi-monthly salary

b. Weekly salary e. bi-weekly salary
c. Daily rate for 5-day week f. hourly rate for 40-hour week
5. B. Caridad is a Product Manager receiving an annual salary of ₱118 000.00. She

1
receives commission on her own sales of 1% and an override of 2 of 1% on her
men’s sales. She sold ₱128 560.00 for the past month. Her men all receive a basic
pay of ₱7 860.00 a month and a commission of 2% on their respective sales plus
1
bonus of 2% on all sales exceeding ₱200 000.00. Her men’s sales are as follows:
F. Sta. Cruz, ₱125 230.00; A. Tante, ₱96 975.00; M. Umali, ₱239 100.00; and E.
Inocencio, ₱108 675.00.
The company deducts SSS contributions of 3.63% and PhilHealth contributions
1
of ₱100.0 and 12% for Withholding tax. Compute for:
a. Gross earnings of B. Caridad
b. Net pay of B. Caridad
c. Gross earnings of each of the salesmen
d. Use Excel to incorporate (a) and (b).
1
6. Yo T. Amo worked for 452 hours during a regular week. In addition, she worked 4
1
hours on Saturday and 3 hours on Sunday. All hours spent over 40 hours during
2
the regular week (Monday to Friday) is paid 50% premium. Saturday work is paid

time-and-a-half while Sunday work is paid double. What is her gross earnings for
the week of her regular rate is ₱18.75 per hour.
7. Below are the employees of the Summit Co., Inc. indicating their basic salary per
month. Consult the Appendices for the SSS contributions, PhilHealth contributions,
Pag-Ibig contributions, Withholding tax table. Compute for their net pay using
Excel.
Basic Monthly Salary
Abigail M. Marinas ₱50 000.00
Bernadette M. Lopez ₱45 000.00
Catherine L. Macuja ₱30 000.00
Dory B. Agapito ₱28 000.00
Efren C. Sequerra ₱22 000.00
Assume that they are all single with no dependents.
8. Atty. Aileen Montenegro derives income from several sources. She receives ₱25
000.00 a month as a part-time consultant to a law firm. She owns stocks of a
company that has currently declared a 15% cash dividend. She owns 1 000 shares
of the ₱100.00 par value stocks of the company. In addition, she owns a sole
proprietorship that earned ₱52 000.00 for the month. She also has investments in
various securities for which she earned a total of ₱5 680.00 for the month. Prepare
a pie chart that will show the composition of her total income for the month.
9. Baby Fernando has a basic annual salary of ₱720 000.00 she generally pays a
10% Withholding tax on her salary. She pays the regular 3.63% for SSS, ₱437.50
for PhilHealth, and 2% for Pag-Ibig. Prepare a pie chart to show the composition
of her gross earnings.

LESSON 5
BUSINESS DATA: GRAPHS AND TABLES
Lesson Competency
• Compare the form (textual, tabular and graphical) of business data

Lesson Objectives
1. Identify the essential parts of a table;
2. Draw a table to presents data;
3. Describe the essential parts of a graph;
4. Describe the different kinds of graphs for data presentation;
5. Give a set of business data and identify the graph or chart to be used; and
6. Draw the graph or chart for a given set of business data.


Let’s start:
We talked about tables, graphs, and charts. How are they different from each
other?
Tables show data in columns. As illustrated in lesson 1, the frequency tables

showed the ages at retirement and scopes in an accounting quiz. Also, the frequency
polygon is the line chart that plotted the scores in the accounting quiz. Here, we can see
that we can relay on what is contained in a table in the form of a chart. Next, we translated
our frequency table into histogram, which is, in essence, a bar chart. Now, we see clearly
that charts and graphs are synonymous. We can distinguish tables from charts and
graphs clearly. We can figure or translate our tables into charts or graphs.
Types of Charts or Graphs

There are several types of charts/graphs, among which are:
1. Line chart/graph – shows information that is connected in some way. It plots the
value of the variable and then connects the dots in order to give an idea of the
relationship of consecutive points. Line charts imply continuous change.
Therefore, line charts are generally used to show trends.
Let us plot the following data to come up with a line chart/graph to depict
the number of topics a student learns in class during the month:
Weeks of the Month 1 2 3 4
Number of Topics Learned 2 5 8 10
This line graph shows that the topics learned increase as time passses by.

2. Bar chart/graph – shows data in terms of rectangles, which are called bars,
hence, bar graph. A bar graph is composed of discrete bars that represent different
categories of data. The length or height of the ar is equal to the quantity within that
category of data. Our retirement age histogram has the frequency on the y-axis
and the ages on the x-aixs. Bar graphs have categories along vertical axis and
values along the horizontal axis. Bar graphs are best used to compare values
across categories.
Let us plot the kinds of movies that selected teenagers prefer given the following data:
Movie Genre Number of Teenagers
Comedy 8
Action 10
Romance 12
Drama 2
Sci-fi 8
We can see from the chart that more teenagers (12) like romance the movies
least ofwhile
the
movies liked by
teenagers is
drama movies. Comedy
and Sci-fi are equally liked
by 8 teenagers totalling 16 teenagers in all. Ten teenagers like action movies.
3. Pie chart/graph – circular chart used to compare parts of the whole. It is divided
into sections representing certain quantities. The salary of a person can be
represented by a whole circle. It can be divided into portions representing items
for which the salary was spent like food, rent, clothing, transportation, etc. The
following pie chart shows the percentage ownership of pets. 4

Pet Ownership
5%4%
6%
55%
30%
Dogs Cats Fish Rabbit Rodents
The pie chart shows 55% of the people surveyed own dogs, 30% own cats, 6%
own fish, 5% own rabbits, and 4% own rodents. Therefore, we can conclude that majority
of the people surveyed own dogs.
Part of the Table
Tables are easily constructed using the Word processor’s table function or a
spreadsheet program like Excel. You can use Excel to compute for the net pay given
gross earnings and payroll deductions. You can also use Excel to compute for gross
earnings given salary, commission, and override. Even without computation, Excel is
excellent for making tables due to its format.
Tables have distinct parts. Emathzone.com has shared the following relative parts
of a table and pointers in making tables.
A statistical table has at least four major parts and some other minor parts. 5
1) The Title
2) The Box Head (column captions)
3) The Stub (row captions)
4) The Body
5) Prefatory Notes
6) Footnotes
7) Source Notes

The general sketch of a table indicating its necessary parts is shown below:
1) The Title
A title is the main heading written in capital shown at the top of the
table. It must explain the contents of the table and throw light on the
table as whole. Different parts of the heading can be separated by
commas.
2) The Box Head and Column Captions

The vertical heading and subheading of the column are called
column captions. The spaces where these column headings are
written are called the box head. Only the first letter of the box head
is in capital letter and the remaining words must be written in small
letters.
3) The Stub and Row Caption
The horizontal headings and subheading of the row are called row
captions and the space where these row headings are written is
called stub.
4) The Body
The main part of the table which contains the numerical information
classified with respect to row and column captions is called the body.
5) Prefatory Notes
A statement given below the title and is enclosed in brackets which
usually describes the units of measurement is called prefatory notes.
6) Footnotes
Footnotes appear immediately below the body of the table providing
further additional explanation.

7) Source Note
The source note is given at the end of the table indicating the source
from where information has been taken. It includes the information
about compiling agency, publication, etc.
General Rules of Tabulation:
• A table should be simple and attractive. There should be no need for further
explanation.
• There should be proper and clear headings for columns and rows.
• Suitable approximation may be adopted and figures may be rounded.
• The unit of measurement should be well defined.
• If the observations are large in number, they can be broken into two or more or
three tables.
• Thick lines should be used to separate the data under big classes and thin line to
separate the subclasses of data.
Parts of a Chart or Graph
Beacon Learning Center discussed the different parts of chart/graph in its website. 6
A line graph uses points connected by a line to show data. Five parts of the line
graph must be present for the graph to be complete:
1. Title Topics Learned in a Month

2. Label Number of Topics Learned, Week
3. Scale Topics learned are equidistant; weeks are equidistant,
meaning the graph is scaled. Also, scales could be linear or
ordinal.
4. Points Points are plotted by matching the topics learned with the
week they were learned.
5. Line The points are connected by the line.

A circle graph or pie chart uses a circle divided into fractions to show data. Three
parts of the circle graph must be present for the graph to be complete:
1. Title Pet Ownership

2. Key The colors and the animals are the key.
3. Circle The circle is the chart itself.
Pet Ownership
5%4%
6%
30% 55%
Dogs Cats Fish Rabbit Rodents
A histogram is a special kind of bar graph that uses data shown as numbers in
order. Four parts of the histogram must be present for the graph to be complete.
1. Title Hours Worked Per Week

2. Scale The number of hours are equidistant; the weeks are equidistant,
meaning, that they are scaled. Also, scales could be linear or ordinal.
3. Labels The vertical axis represents number of hours; the horizontal axis
represents weeks.
4. Bar The bars are clearly shown depicting the number of hours in
the week concerned.

General Rules in Making a Chart/Graph
The flowingdata.com has given seven tips in preparing a chart/graph:7
1. Check the data. If your data is weak, your graph is weak, so make sure it makes
sense.
2. Explain encodings. Provide a legend, directly labelling shapes or describing
your graphic in a lead-in paragraph.
3. Label axes. Label your axes so that the readers know what scale points are
plotted on.
4. Include units. Indicate the unit of the numbers or values in the graph. It could
be hours, ages, units, or even currency.
5. Keep your geometry in check. Size circles and other two-dimensional shapes
by area, unless it is a bar graph or something like that.
6. Include your sources. Always include where the data is from.
7. Consider your audience. Take into account who and what your graphs and
charts are for, and design accordingly.
QUIZ 5
Elaine earns ₱24 500.00 a month. She spend 55% for rent, 18% for food, 12% for
clothing, 10% for utilities, 7% for savings, and 3% for transportation.
1. Prepare a pie chart.

2. How much does Elaine spend for each item?
3. For what does Elaine spend the most? The least?
Lesson Summary
• A set of data can be presented as a table or a chart or a graph. Tables show data
in columns.
• Charts or graphs make use of line (line graph), circle (circle graph/pie chart), or
bar (bar graph).
• Line chart/graph shows information that is connected in some way. It plots the
value of the variable and then connects the dots in order to give an idea of the
relationship of consecutive points.
• A bar graph is composed of discrete bars that represent different categories of
data. The length of height of the bar is equal to the quantity within that category of
data.
• Pie chart/circle graph is a circular chart used to compare parts of the whole. It is
divided into sections representing certain quantities.
• A statistical table has at least four major parts and some other minor parts. The
major parts are the title, the box head or column captions, the stub or row captions,
and the body. The minor parts are the prefatory notes, footnotes, and source notes.
• A chart or graph has varied parts. Some of these parts are title, label, scale, bar
(for a bar graph), key or legend, points, line (for line graph), and circle (for a pie
chart/circle graph).
LESSON 5 ASSESSMENT
1. A survey of 25 people living in an urban area and 25 people living in a rural area
revealed the following relative to marital status:
Single Married Live-in Separated Divorced Widowed
Urban area 5 7 8 3 1 1
Rural area 8 10 2 1 0 4
a. Prepare a proper table and label the parts.

b. What percentage of the respondents in each area is married? Single?
c. What is the ratio of single to married respondents in each area?
d. What proportion of each sample is widowed?
e. What percentage of the single respondents lives in the urban area? Rural area?
f. What is the ratio of married to live-in in each area?
g. What conclusion can you derive from your table?
2. At the College of Mass Communication of a certain university, the number of male

and female students in the various major fields of study are as follows:
Communication
Journalism Broadcasting Research
Film
Male 115 99 75
111
Female 85 130 20
65
a. Prepare a table in proper form and label the parts.
b. What percentage of Journalism majors is male? Female?
c. What proportion of Communication Research majors are male? Female?
d. Among Film majors, what is the ratio of male to female?
e. What proportion of Broadcasting majors is male? Female?
f. What conclusion can you derive from your table?
3. Jessie is a professor earning ₱40 000.00 a month. Of this, he spends ₱16 000.00
for food, ₱6 000.00 for rent, ₱4 000.00 for clothing, ₱1 500.00 for utilities, and the
rest for savings.
a. What percent is each of the items of expenditure?
b. Prepare a circle graph. Color-code your graph. Label the parts of the graph.

4. You are presented the following table that shows the average hours per day that
selected appliances and lights are used:
Average Hours Per
Day
Lights/Appliances Weekdays Weekends
Lights 12 16
TV 6 12
Computer 4 8
Refrigerator 24 24
a. Prepare a bar graph to depict the date in the table. Colour-code your bars.
Label the parts of the graph.
b. What do the numbers in the vertical axis represent?
c. What do the numbers in the horizontal axis represent?
d. Which item is used on weekends with twice as many hours on weekdays?
e. Aside from the refrigerator, which item is used most on weekdays?
Weekends?
f. What conclusions will you draw from your graph?
5. Following are hypothetical election results:

Candidates Men Women Total Votes
Agapito 502 513 1 015
Bautista 521 2 043 2 564
Carlos 3 018 2 205 5 223
David 1 729 4 008 5 737
Total 5 770 8 769 14 539
a. Rank the candidates in terms of votes garnered from top to bottom.

b. Which candidate got the most votes from women? Men?
c. Reconstruct the table to show percentages for men, women, and total
votes.
d. Would you kow from the table the votes of senior citizens?
e. What conclusions can you get from the table?
f. Prepare a chart or graph that can depict the data given in the table.
6. You were given the following data on the hours Edith spent on activities in a day:
Activity Number of Hours Spent
Work 8
Sleep 7
Meals 2

Travel 2
Leisure 0.5
Home Balance
a. Compute the corresponding percent for the activities.
b. Prepare a color-coded pie chart. Label the parts of the chart.
c. What conclusions can you derive from your chart?

LESSON 6
MEASURES OF CENTRAL TENDENCY
• Analyse and interprets the data presented in the table using measures of central
tendency
• Contrast mean, median, and mode
• Solve problems involving mean, median and mode
Lesson Objectives
1. Differentiate mean, median, and mode;

2. Compute for the mean, the median, and the mode; and
3. Identify when to use the mean, the median, and the mode.

complete name of the subject teacher, title of the lesson, quiz, and assessment

Let’s start:
Measures of Central Tendency

After data has been Age Frequency gathered, it has to be put into
a form that can be 54 3 interpreted. One of the
statistics usually computed for a set of data is the
55 1
measure of central tendency, the average. An
average is a single figure 56 1 that stands for or represents
a group of figures. 57 2
58 2
Measure of Central Tendency (also referred to
as measure of center or 60 2 central location) is a
summary measure that attempts to describe a whole set of data with the single value that
represents the middle or center of its distribution. There are three main measures of
central tendency: the mean, the median, and the mode. Each of these measures
describes a different indication of the typical or central value in the distribution.
There are three ways of measuring central tendency or average:
1. Mean (x̅)
2. Median (Md)
3. Mode (Mo)
The Mean (x̅)
We will use the same data from our frequency table on the age of retirement.
To find the mean, add up all the numbers, then divide by how many numbers there
are. This also known as the arithmetic average. Looking at the retirement age distribution,
the mean is calculated by adding together all the values and dividing by the number of
observations.
∑x
x̅ = n
Where n is the number of occurrences or data
= 54 + 54 + 54 + 55 + 56 + 57 + 57 + 58 + 58 + 60 + 60
11
= 623
11
= 56.6 years
The mean is at the center of the distribution. In physics, we can say it is at the
fulcrum, the center of gravity, or the equilibrium point.

The mean for a grouped data requires getting the mean (x̅) for each class and
multiplying the frequency by the mean (fx) and dividing the total f(x) by n or number of
occurrences. Using our table of scores in an accounting quiz:
Score Frequency
70 – 74 13
75 – 79 13
80 – 84 19
85 – 89 8
90 – 94 7
Total 60
We compute for the mean as follows:

Frequency
Score F x̅ f x̅
70 – 74 13 72 936
75 – 79 13 77 1 001
x̅ is the 80 – 84 19 82 1 558 mean or midpoint
of the class. It is adding the class
85 – 89 8 87 696
limits and dividing the sum by 2:
90 – 94 7 92 644
x̅ = Total N = 60 4 835 (70 + 74) / 2 = 72
= (75 + 79) / 2 = 77
= (80 + 84) / 2 = 82
= (85 + 89) / 2 = 87
= (90 + 94) / 2 = 92
Then we multiply the x and that we got for each class by its frequency to get the fx
shown in the table. Adding all the fxs, we get 4 819. The mean would be:
∑x 4 835
x̅ = = = 80.58
n 60
Note that the mean is within the class (80 – 84) with the highest frequency (19).
The Median (Md)
The median is the middle value or midpoint in a distribution when the values are
arranged in ascending or descending order. The median divides the distribution in half
(there are 50% of observations on neither side of the median value). These halves meet
at the median position. If the number of observations is odd, the median fits perfectly and
the depth of the median position will be a whole number. If the number of observations is
even, the depth of the median position will include a decimal. Looking at the retirement
age distribution (which has 11 observations), the median is the middle value, which is 57
years.
54, 54, 54, 55, 56, 57, 57, 58, 58, 60, 60
When the distribution has an even number of observations like the following:
52, 54, 54, 54, 55, 56, 57, 57, 58, 58, 60, 60
The median value is the mean of the two middle values. In the foregoing distribution, the
two middle values are 56 and 57, therefore, the median = [(56 + 57) / 2] = 56.5 years.
Finding the median for a grouped data:
The median is in the class where the cumulative frequency reaches half the sum
of the absolute frequencies. The following is adopted from:
n/2−cfi
Md = Lm + [ ]
fm
Where Lm is the lower boundary of the median class;
n/2 is half the sum of the absolute frequencies;
cf is the cumulative frequency immediately above the median class;
fm is th frequency of the median class; and
i is the class width.
Using our data on the scores obtained in an accounting quiz:
Score Frequency Cumulative

F Frequency
70 – 74 13 13
75 – 79 13 26
80 – 84 19 45
85 – 89 8 53
90 – 94 7 60
Total N = 60

Using our formula:
n/2−cfi
Md = Lm + [ ]
fm
Lm = 79.5 (between the 79 upper limit of the class above the median class and
the 80 lower limit of the median class)
60
n/2 = = 30
2
cf = 26
fm = 19
i=5
30−26
Md = 79.5 + = 79.5 + (4 / 19)5 = 79.5 + 1 = 80.5
19
Take note that our mean for the same grouped data of 80.32 is very near the
median. The median falls within the median class, which has the highest frequency, 80 –
84.
The Mode (Mo)
To find the mode or modal value, place the numbers in value order (either
ascending or descending), then count how many are there for each number. The mode
is the number which appears most often (the one with the highest frequency). In our
retirement age frequency distribution, the most commonly occurring value or highest
frequency (3) is 54; therefore, the mode of this distribution is 54 years. If all values occur
only once, there would be no mode; however, there can be more than one mode. If you
have a series of number and, say, all of 8, 5, and 3 appear 3 times, then 8, 8, and 3 are
the modes.
When data are grouped, the mode is defined as the midpoint of the interval
containing the largest number of cases. In our set of data of scores on an accounting
quiz:
Score Frequency
70 – 74 13
75 – 79 13
80 – 84 19
85 – 89 8
90 – 94 7
Total 60

The interval containing the largest number of cases (frequency of 19) is 80 – 84.
The midpoint of 80 – 84 is 82, which is, therefore, the mode. Alternatively, it is the mean
of the two scores or [(80 + 84) / 2] = 82.
Example: Abigail Monte Vista manages a coffee house called Our Snack Bar. The owner wants
to know the average length of employment at the coffee house. Abigail gathered the data
relative to those who left the coffee house for the past 5 years. There were only eight
employees who left the coffee house for the said period. Below are the lengths of time
the said employees stayed with the coffee house:
Winnie Montenegro 60 months
Rodrigo Santos 45 months
Sarah Lopez 32 months
Tessa Garcia 8 months
Crescinia Cruz 13 months
Roberto Herrera 32 months
Bernadette Lopez 20 months
Erlinda Buensuceso 32 months
Let us compute the mean, median, and the mode. The mean would be the sum of
the lengths of time divided by 8, which would be:
Mean = 60 + 45 + 32 + 8 + 13 + 32 + 20 + 32
8
= 242
8
= 30.25 months
The median would be the middle of the values; therefore, if we arrange the
figures:
8 13 20 32 32 32 45 60
Since there are 8 figures, to get the median, we get the mean of the two middle
values, which are 32 and 32 which will give us 32 [(32 + 32) / 2]. The mode is the one
with the highest frequency, which in this case is also 32.

QUIZ 6
Jorge owned a service station. For the past 6 days, his record showed the
number of tune ups he did:
Day Number of Tune Ups
Monday 6
Tuesday 5
Wednesday 6
Thursday 8
Friday 9
Saturday 11
1. Find the range, the mean, the median, and the mode.
2. Double the value of each number in the set. Find the range, the mean, the
median, and the mode.
3. How does doubling the number affect the range, the mean, the median, and
the mode?
Lesson Summary
• A measure of central tendency (also referred to as measure of center or central
location) is a summary measure that attempts to describe a whole set of data with
a single value that represents the middle or center of its distribution.
• There are three main measures of central tendency: the mean, the median, and
the mode. Each of these measures descries a different indication of the typical or
central value in the distribution.
• The mean also known as the arithmetic average, is the result of adding up all the
numbers, then dividing the result by how many numbers there are.
∑x
❖ The mean for an ungrouped data is x̅ = n
∑x
❖ The mean for a grouped data is x = n
• The median is the middle value or midpoint in a distribution when the values are
arranged in ascending or descending order. For a grouped data, the median is in
the class where the cumulative frequency reaches half the sum of the absolute
frequencies. The following is used:
n/2−cfi
Md = Lm + [ ]
fm
Where Lm is the lower boundary of the median class;

n/2 is half the sum of the absolute frequencies;
cf is the cumulative frequency immediately above the median class;
fm is th frequency of the median class; and
i is the class width.
• The mode is the number which appears most often (the one with the highest
frequency). When data are grouped, the mode is defined as the midpoint of the
interval containing the largest number of cases.
1. Find the range assuming that you were given the following speed of some
animals in miles per hour (mph).
30 75 20 85 65 95
2. Given the following set of numbers

75 28 38 55 38 49
Find:
a. Mean
b. Median
c. Mode
3. Scientists measured the speed at which six monkeys ran tree course at miles
per hour.
Monkey 1 2 3 4 5 6
Speed 20 50 35 25 45 40
Find:
a. Mean
b. Median
c. Mode
4. Given the following set of data:

21 35 49 16 35
Find:
a. Mean

b. Median
c. Mode
5. You were given the following data relative to hypothetical salaries of different
occupations in the Philippines:
Teacher: 12K Lawyer: 20K
Call Center Agent: 10K Hotel Front Desk: 7K
Call Center Supervisor: 20K Fast Food Manager: 15K
Waiter/Waitress: 5K University Professor: 25K
Doctor: 35K Bank Teller: 10K
Retail Salesperson: 6K
Prepare the following:
a. Frequency polygon
b. Frequency distribution table
Find the:
a. Mean
b. Median
c. Mode
6. You were given the following hypothetical data relative to the gross monthly
income of certain occupation in the Philippines.
Occupation Average Gross Monthly Income
Airline Pilot ₱98 575.00
Engineer ₱57 899.00
Professor ₱49 524.00
Accountant ₱47 997.00
Teacher ₱44 991.00
Flight Attendant ₱32 530.00
Messenger ₱18 448.00
Bus Driver ₱18 802.00
Hotel Receptionist ₱18 754.00
Car Mechanic ₱18 711.00
Professional Nurse ₱23 669.00
Chambermaid ₱17 843.00
Find the:
a. Mean
b. Median

7. You were given the following grouped data for the time it took employees of the
Philippine College of Commerce go to work:
Time of Travel to Work (Minutes) Frequency
1 – 10 7
11 – 20 15
21 – 30 12
31 – 40 10
41 – 50 8
51 – 60 5
Find:
a. Mean
b. Median
c. Mode
8. Joseph grew eggplants in his garden. He measured each eggplant he

harvested. The data he gathered showed the lengths of the eggplants and the
number of eggplants in each length group.
Length (mm) Frequency
150 – 154 6
155 – 159 3
160 – 164 5
165 – 169 8
170 – 174 8
175 – 179 12
180 – 184 5
185 – 189 3
Find:
a. Mean
b. Median
c. Mode
9. The ages of the 107 people who live in a nice place by the sea are grouped
according to age as follows:
Age Number of People
0-9 15
10 – 19 20
20 – 29 25
30 – 39 16
40 – 49 10
50 – 59 10
60 – 69 7
70 – 79 3
80 – 89 1
Find:
a. Mean
b. Median
c. Mode

LESSON 7
VARIABILITY
• Define range, variance and standard deviation

• Solve problems involving range, variance and standard deviation
Lesson Objectives
1. Differentiate range, interquartile range, variance, and standard deviation;

2. Compute range, interquartile range, variance, and standard deviation; and
3. Analyse business data using the measure of variability.

complete name of the subject teacher, title of the lesson, quiz, and assesment

Let’s start:
Variability
Variability refers to how spread out a group of scores is. In other words, variability
measures how much your scores differ from each other. The terms variability, spread,
and dispersion are synonyms. Data sets with similar values are said to have little
variability, while data sets that have values that are spread put have high variability.
There are four frequently used measures of variability: range, interquartile range,
variance, and standard deviation.
Range
The range is the simplest measure of variability. To calculate the range, you take
the smallest number and subtract it from the highest number. This allows us to know the
spread of our data. Although it is simple to calculate, the range is sensitive to outliers or
values that are significantly higher or lower than the rest of the data set, and should not
be used when present. Authors differ a little on the computation of range. Walpole defined
range as “the difference between the largest and the smallest number in the set” while
Downie and Heath defined it as “highest minus lowest plus one.” However, Walpole’s
definition is adopted by many. In formula form, that would be
Range = H – L
We can see that Warpole and the other websites did not add one in computing for
the range, which we will follow.
Interquartile Range (IQR)
Since range should not be used when outliers are present, the alternative measure
to use would be the interquartile range (IQR). Interquartile range (IQR) is a measure of
variability based on dividing a data set into quartiles. Quartiles divide a rank-ordered data
set into four equal parts. The values that divide each part are called the first, second, and
third quartiles and they are denoted by Q1, Q2, and Q3, respectively.
• Q1 is the middle value in the first half of the rank-ordered data set.
• Q2 is the median value in the set.
• Q3 is the middle value in the second half of the rank-ordered data set.
The formula to find the interquartile range is

IQR = Q3 – Q1
Let us assume the following data on the midterm exam of a certain class:
52, 71, 55, 75, 81, 85, 100, 89, 83, 90, 90, 99, 100
For a set of number with an odd number of data points, find the IQR, we follow the
following steps.
1. List the data in numerical order.

52, 55, 71, 75, 81, 83, 85, 89, 90, 90, 99, 100, 100
2. Find the median.

52, 55, 71, 75, 81, 83, 85, 89, 90, 90, 99, 100, 100
3. Place brackets around the numbers above and below the median. Do not place
brackets around the median.
First half Median Second half
(52, 55, 71, 75, 81, 83) 85 (89, 90, 90, 99, 100, 100)
a. (52, 55, 71, 75, 81, 83) = (71 + 75) / 2 = 73 is Q1

b. (89, 90, 90, 99, 100, 100) = (90 + 99) / 2 = 94.5 is Q3
4. Solve for IQR:

IQR = Q3 – Q1 = 94.5 – 73 = 21.5
For a set of data with even number of data points, the middle value is the
average of the two middle values for the representative quartiles. For example,
consider the following numbers:
1 3 4 5 5 6 7 11
Q1 is the middle value in the first half of the data set. Since the number of
figures is even, the first half would be:
1 3 4 5
To get Q1, the two middle figures 3 and 4 and the average of 3 and 4 would
be:
Q1 = (3 + 4) / 2 = 3.5
To get Q3, we get the second half of the data set:

5 6 7 11
The two middle figure are 6 and 7 and the average of 6 and 7 would be Q3:
Q3 = (6 + 7) / 2 = 6.5
Now that we have Q1 and Q3, we can now solve for the IQR:
IQR = Q3 – Q1 = 6.5 – 3.5 = 3
Alternatively, the IQR can be defined as the difference between the largest
and smallest values in the middle 50%of a set data. This will require that we
remove observations in the lower and upper quartile. In our example of
1 3 4 5 5 6 7 11
We remove 1 and 3 from the first half and 7 and 11 from the second half.
We are left with
4 5 5 6
The highest values is 6 and the lowest value is 4; therefore,
IQR = 6 – 4 = 2
Variance
The variance is a measure of how close the scores in the data set are to the middle
of the distribution. It is mainly used to calculate the standard deviation and other statistics.
The variance is defined as the average of the squared differences from the mean.
It is important to distinguish between the variance of population mean and the

variance of a sample mean. The population in statistics includes all members of a defined
group that we are studying or collecting information on for data-driven decisions. A part
of the population is called a sample. It is a portion, slice, or part of the population, and
has all its characteristics. A sample is a scientifically drawn group that actually possesses
the same characteristics as the population if it is drawn randomly.
The variance of a population mean is denoted by ơ2; and the variance of a sample
mean, by s2.
The variance of a population mean is the average squared deviation from the
population mean, as defined by the following formula:

∑ (𝑋i − µ)
ơ2 = n
where:
ơ2 is the population variance;
Xi is the ith element from the population;
µ is the population mean; and
n is the number of elements in the population.
Example: A population consists of four observations: (1, 3, 5, 7). What is the variance?
Solution:
1. Compute for the population mean.

∑x
µ= n
(1+3+5+7)
= 4
µ=4
2. Then, we plug all known values in the formula for the variance of a population:
ơ2 = ∑ (𝑋i − µ)2 / n
[(1−4)2 +(3−4)2+(5−4)2 +(7−4)2 ]
ơ2 = 4
[(−3)2 +(−1)2 +(1)2+(3)2
ơ2 = 4
[9+1+1+9]
ơ2 = 4
20
ơ2 = 4
ơ2 = 5
The variance of a sample mean is defined by slightly different formula:
∑(𝑋i − µ)2
s2 = (n−1)
where:
s2 is the sample variance;
x is the sample mean;

xi is the ith element from the sample; and
n is the number of elements in the sample.
If you are working with a simple random sample, the sample variance can be
considered an unbiased estimate of the true population variance. Therefore, if you want
to estimate the unknown population variance, based on known data from a simple random
sample, sue this formula.
Example: A simple random sample consists of four observations: {1, 3, 5, 7}.

What is the best estimate of the population variation?
Solution: This problem can be handled exactly like the previous problem,
except that we use the formula for calculating sample variance.
∑(𝑋i − µ)2
s2 = (n−1)
[(1−4)2 +(3−4)2 +(5−4)2 +(7−4)2 ]

s2 = (4−1)
[ −3 + −1 +(1)2 +(3)2]
( ) 2 ( ) 2
s2 = (4−1)
[9+1+1+9]
s2 = 3
20
s2 = 3
s2 = 6.667
We can summarize the foregoing by the following to calculate the variance:
1. Work out the mean (the simple average of the numbers).

2. Then, for each number, subtract the mean.
3. Square the difference obtained above (the squared difference).
4. Divide the sum of squares by the total number of data in the set.
Assume that you decided to get the height of your dog and those of your friends
and you got the following results:
600 mm, 470 mm, 170 mm, 430 mm, 300 mm

Let us follow the steps above:
1. Work out the mean (the simple average of the numbers).

600+470+170+430+300 1 970
Mean = = 5 = 394
5
2. Then for each number, subtract the mean.
600 – 394 = 206
470 – 394 = 76
170 – 394 = -224
430 – 394 = 36
300 – 394 = -94
3. Square the difference obtained above (the squared difference).
(206)2 = 42 436
(76)2 = 5 776
(-224)2 = 50 176
2
(36) = 1 296
(-94)2 = 8 836
4. Divide the sum of squares by the total number of data in the set.
108 520
f = 21 704
5
So, the variance is 21 704.
Standard Deviation
The standard deviation is a measure of how spread out numbers are. Its symbol
is ơ (the Greek letter sigma). Square root of the variance. Therefore, in our foregoing
2
example, the standard deviation would be
ơ = √21 704 = 147.32
For example on the variance of population mean, which was 5, the standard
deviation would be the √5 = 2.236068 and for the example on the variance of sample
mean, which was 6.667, the standard deviation would be √6.667 = 2.5820534.
The Internet has square root calculators. Scientific calculators can also be used to
compute for standard deviation.

QUIZ 7
Find the range, interquartile range, variance, and standard deviation for the
average prices of certain commodities shown.
Average Price
Milk (regular, 1 l) ₱75.33
Loaf of fresh white bread (500 g) ₱48.96
Rice (white, 1 kg) ₱42.88
Eggs (1 dozen) ₱66.33
Local cheese (1 kg) ₱263.88
Chicken breast (boneless, skinless, 1 kg) ₱151.80
Apples (1 kg) ₱98.79
Oranges (1 kg) ₱96.42
Tomatoes (1 kg) ₱50.12
Potatoes (1 kg) ₱63.98
Lesson Summary
• Variability means how much your scores differ from each other. The terms
variability, spread, and dispersion are synonymous.
• There are four frequently used measures of variability: the range, interquartile
range, variance, and standard deviation.
• The range is the simplest measure of variability. It is the difference between the
smallest number and the largest number.
• The interquartile range (IQR) is used when sets of data contain outliers. The IQR,
or the middle fifty, is the range for the middle fifty percent of the data. The IQR only
considers middle values, so it is not affected by outliers.
• The variance is a measure of how close the scores in the data set are to the middle
of the distribution or the mean. It is mainly used to calculate the standard deviation
and other statistics. It is also defined as the average of the squared differences
from the mean.
• The standard deviation is a measure of how far numbers in a data set are from
each other. Its symbol is ơ2 (Greek letter sigma). Square the root of the variance.

LESSON 7 ASSESSMENT
1. The Wechsler Intelligence Scale for Children was given to a class of 24 sixth
grade students. Their IQs are:
97 114 121 100 110
98 112 100 109 104
94 115 116 112 102
91 100 102 103 115
a. What are the mean and median IQs for the class?
b. Find the:
(1) range
(2) interquartile range
(3) variance
(4) standard deviation
2. Given the following data:

x
12
10
8
6
4
∑x = 40
Find the (a) variance and the (b) standard deviation.
3. You were given the following set of numbers:

8 32 25 16 14 20 35
Find the:
a. Range
b. Interquartile range
c. Variance
d. Standard deviation

4. Remove the highest number from the data set in number 3. Find the:
a. Range
c. Variance
d. Standard deviance
5. Abram and his friends love cats. They decided to measure how tall their cats are
and they obtained the following results:
300 mm 235 mm 85 mm 215 mm 150 mm
Find the:
a. Range
c. Variance
d. Standard deviation

LESSON 8
TESTS OF SIGNIFICANT DIFFERENCE
• Define Z-test, t-test, and F-test

• Contrast null hypothesis and alternative hypothesis
• Determine the significant difference of the variables applying Z-test, t-test, and F-
test.
• Explain the meaning of the level of significance, and when to reject or accept a
hypothesis
Lesson Objectives
1. Differentiate null hypothesis and alternative hypothesis;

2. Understand the meaning of level of significance;
3. Differentiate one-tailed test and two-tailed test;
4. Differentiate the usage t-test, z-test, and F-test

5. Use one whole yellow paper for quizzes and long bond paper for applications.
Use black or blue ball pen only.
complete name of the subject teacher, title of the lesson, quiz, and application

Let’s start:
Before we study the process of test of difference, let us study the terms used:
• Population consists of the totality of the observations. If we classify students of a

school according to blood type and there are 500 students, the population is 500
(n = 500).
• Sample is a subset of a population. Samples taken must be representative of the
population to avoid inferences that are erroneous; therefore, we generally use a
simple random sample
• Simple random sample of n-observations (population) is a sample that is chosen
in such a way that every subset of n-observations of the population has the same
probability of being selected. For a small population of, say, 50, we may write the
observations in cards and place all the cards representing the population in a jar.
After shaking the jar thoroughly, we can just randomly pick the number of cards
representing the sample, say, 10. Since the sample is randomly selected, we can
say that any interference we make concerning the population and sample is
unbiased. For a large population, researchers use the Table of Random Numbers.
• Hypothesis is a statement about a population. Researchers study a population and
make a general statement about that population. This is the hypothesis.
Before we define the null hypothesis and the alternative hypothesis, we will describe
three possible outcomes assuming that we are conducting a study of the result in
using two different teaching methods for math. In this study, there are three possible
outcomes.
1. Method A is equal to Method B (A = B)
2. Method A is better than Method B (A > B).
3. Method A is poorer than Method B (A < B).
Null hypothesis – Outcome 1 forms the basis of the null hypothesis, which
can be stated as:
(1) “There is no significant difference between Method A and Method B in
teaching math.”; or
(2) “Method A is equal to Method B in teaching math.”
However, the most common way of stating the null hypothesis is statement
(1).
Another way of stating the null hypothesis would be:
(1) “Method A is equal to or better than Method B in teaching math.”; or

(2) “Method A is equal to or poorer than Method B in teaching math.”
• The null hypothesis is non-directional and is tested by a two-tailed test. The null
hypothesis is formulated with the hope that it be rejected and is denoted by H 0. A
null hypothesis concerning a population parameter will always be stated so as to
specify an exact value of the parameter; whereas, the alternative hypothesis (H1)
allows for the possibility of several values. So, if Ho is the null hypothesis, p = 0.5
for binomial population, the alternative hypothesis H1 might be p < 0.5, p > 0.5, p
≠ 0.5. The rejection of the null hypothesis leads to the acceptance of the alternative
hypothesis.
Alternative hypothesis – denoted as H1 can be expressed:
(1) “Method A is better than Method B in teaching math.”
(2) “Method A is poorer than Method B in teaching math.”
(3) “Method A is either better or poorer than Method B in teaching math.”
The alternative hypothesis are directional hypotheses and are tested by a
directional or one-tailed test.
In deciding whether to reject a hypothesis, there are two types of error that
may be committed. They are:
Type I error – rejection of the null hypothesis when it is true.
Type II error – acceptance of the null hypothesis when it is false.
• Level of significance – probability of committing a type I error denoted by ɑ (alpha);

[ɑ = P (type I error)]. Usually, the level of significance is equal to 1%, 5%, or 10%.
Other alphas that are greater than 10% may be used, but it increases the chances
of committing a type I error.
• One-tailed test is a statistical test that is directional wherein the critical region is
located in the left tail or right tail of the distribution. It contains inequality symbols
such as greater than, less than, greater than, or equal to, and less than or equal
to that are basically written in the hypotheses.
We are now ready to study the process of testing differences. The following were
taken from Statistics by Villamoran (2010):17
Steps in Conducting the Test of Difference

1. State the null and alternative hypotheses.
2. Select the appropriate test statistic and establish the critical region.
3. Compute for the test statistical value.
4. Make a decision. The decision rule states, “Reject Ho if the test statistic value
lies inside the critical region; if not, reject the H1.”
5. Make a conclusion.

Null and Alternative Hypothesis
1. The principal of Masagana High School claims that the average IQ of their
students is 90%. A teacher of this school feels that the IQ of one of his classes
is not 90 so he or she conducts a statistical test.
H0: The average IQ is equal to 90. (µ = 90)
H1: The average IQ is not equal to 90. (µ ≠ 90)
2. A delivery service claims that it takes an average of 25 hours or less to send a
package from Bulacan to Palawan. A certain customer is doing a study to test
the truth of the claim. Several complaints had led the consumer to suspect that
the delivery time is longer than 25 hours.
H0: The average time is less than or equal to 25 hours. (µ ≤ 25)
H1: The average time is greater than 25 hours. (µ > 25)
Z-test and t-test

The z-test is used for large sample sizes specifically when n is greater than or
equal to 30 (n ≥ 30). The t-test, formulated by Gosset (1908) is used for small numbers,
which are less than 30 (n < 30).
(𝐱̅− µ)√𝒏
z-test = ơ
(𝐱̅− µ)√𝒏
t-test = with degrees of freedom (fd) = n – 1
𝐬
where,
x̅1 – sample mean
µ - population mean
n – sample size
s – sample standard deviation
ơ – population standard deviation
Examples:
1. A buyer of Makulay paint complains that he or she is getting less paint than 4
gallons per container from his or her supplier. A sample of 16 containers
reveals a mean of 3.8 grams with a standard deviation 0f 0.46 grams. Is the
buyer’s complaint valid? Use 0.01 level of significance.
Solution:
a. H0: The container contains 4 gallons (µ = 4 gal).
H1: The container contains less than 4 gallons (µ < 4 gal).
b. n = 16 (t-test, one tailed)

df = n – 1
df = 16 -1
df = 15
ɑ = 0.01
Critic value – 2.602
(3.8−4)√16
c. t-test value = = -1.74
.46
d. Decision: Since the computed value is set inside the acceptance region,
one must accept the null hypothesis.
e. Conclusion: The complaint of the buyer is not valid.
2. Test the hypothesis that the average content of packs of Great instant noodles
is 75 grams if a sample of 85 packs has the mean weight of 74.2 grams with
the standard deviation of 2.6 grams. Use a .01 level of significance.
Solution:
a. H0: The average content of packs is 75 grams (µ =75 grams).
H1: The average content of packs is less than 75 grams (µ < 75 grams).
b. n = 85, (z-test, one tailed)
ɑ = .01
Critical value: ± 2.33
c. z-test value
(74.2−75) √88
= = -2.84
2.6
d. Decision: Since the computed value is set outside the acceptance region,
one must reject the null hypothesis.
e. Conclusion: The average content of packs of Great instant noodles is less
than 75 grams.
Testing the Difference between Two Sample Means

There are two sampling methods that can be used to compare two populations:
independent sampling and dependent sampling or matched pairs.
Independent Sample Means
Two samples are independent if they are selected from two different
populations.

Test Statistics to be used:
Examples:
1. The production
manager of
Mark’s
Manufacturing
would like to
decide on
which of the
two plants should
be given the
responsibility
of producing the soda bottle cups. This decision will be based on productivity
levels. A sample of 50 days at the Silver Star Plant produced the mean of 104.6
thousand cups a day with s = 13.4 thousand. The Skyfall Plant produced an
average of 98.7 thousand per day with s = 15.2 thousand over 60 days. Do
these plants differ significantly in production level? Use 0.05 level of
significance.
Solution:

a. Ho: There is no significant difference between the production means of the
two plants. (µ1 = µ2)
b. H1: There is significant difference between the production means of the two
plants. (µ1 ≠ µ2)
c. n1 = 50 and n2 = 60, (z-test)
ɑ = 0.5
Critical value: ± 1.96
d. t-test value
(425 – 460)
(17−1)502 +(15−1)472 1 1
=√ (17 + 15) = -2.032
17+15=2
e. Decision: Since the computed value lies on the rejection region, one must
reject the null hypothesis.
f. Conclusion: The two plants significantly differ in production level.
2. The supervisor of Balagtas Restaurant is planning to put more service crew in

the evening shift if his or her assistant’s report is valid that customers are fewer
in the afternoon than in the evening. To test the validity of the report, the
number of afternoon and evening customers was recorded. Results showed
that in sample of 15 days, the afternoon customers averaged 425 with s = 47;
and in 17 days the evening customers averaged 460 with s = 50. Should there
be additional crew in the evening shift? Use 0.01 level of significance.
a. Ho: The average number of customers in the afternoon is greater than or
equal to that of the evening. (µ1 ≥ µ2)
b. H1: The average number of customers in the afternoon is less than that of
the evening. (µ1 < µ2)
c. n1 = 17 and n2 = 15, (t-test, one tailed)
ɑ = .01
Critical value: -2.457
d. z-test value
(104.6 – 98)
13.42 15.22
=√ + = -2.032
50 60
e. Decision: Since the computed value lies on the acceptance region, one
must accept the null hypothesis.
f. Conclusion: There is no need to add crew in the evening.

Dependent Sample Means
Two sample means are dependent if the observations in both are similar in terms
of relevant characteristics and differ only in one aspect. It uses the same group of
samples.
t-test
d√n
t= Sd
where:
𝑑̅ – Man of difference of the paired observed values

∑(𝑥 −𝑥 )
𝑑̅ - 2𝑛 1
𝑆𝑑 – Standard deviation of the difference (d)
n – Number of pairs in the sample
Example: The Lopez Accounting Firm wishes to compare the use of two different
spreadsheets by having 8 employees work with each spreadsheet while listing the mean
number of error they committed. The following are the results. Conduct the test using 0.01
level of significance.
Where:
𝑑̅ = .125
Sd = 1.64208
n=8
Solution:
a. Ho: There is no significant difference in the errors of the two
spreadsheets. (µ1 = µ2)

b. H1: There is significant difference in the errors of the two spreadsheets.
(µ1 ≠ µ2)
c. n1 = 8, (t-test, two-tailed)
ɑ = 0.01
Critical value: ±3.499
t-test value
(.125)√5
= 1.64208
= 0.21532
= 0.22
d. Decision: Since the computed value lies on the acceptance region, one
must accept the null hypothesis.
e. Conclusion: There is no significant difference in the two spreadsheets.
The following examples are taken from Walpole’s Introduction to Statistics to give
the students an overview of the types of problems involved in the foregoing discussions.
Always remember that when we reject the null hypothesis, we accept the
alternative hypothesis and vice-versa.
1. A manufacturing company of sports equipment has developed a new synthetic

fishing line that it claims has a mean breaking strength of 8 kilograms with a
standard deviation of 0.5 kilogram. Test the hypothesis that µ = 8 kilograms against
the alternative that µ ≠ 8 kilograms if a random sample of 50 lines is tested and
found to have a mean breaking strength of 7.8 kilograms. Use a 0.01 level of
significance.
Solution: We follow our six-step procedure as discussed in our foregoing section:
a. H0: µ = 8 kilograms
b. H1: µ ≠ 8 kilograms
c. ɑ = 0.01
̅̅̅
(x−µ)√n
d. Critical region: z< -2.575 and z>2.575 where z =
ơ
e. Computations: x̅ = 7.8 kilograms, n = 50 50; hence,
7.8 8√50
z= = -2.83
0.5
f. Conclusions: Reject H0. The average breaking strength is not equal to 8, but is,
in fact, less than 8 kilograms. Therefore, we accept the alternative hypothesis,
H1 : µ ≠ 8 kilograms.
2. A random sample of 100 recorded deaths in the United States during the past year
showed an average life span of 71.8 years, with a standard deviation of 8.9 years.
Does this seem to indicate that the average life span today is greater than 70
years? Use a 0.05 level of significance.
Solution:
a. H0: µ = 70 years
b. H1: µ > 70 years
c. ɑ = 0.5
(𝑥− µ)√n
d. Critical region: z > 1.645 where z = ơ
71.8−70 √100
e. Computations: x̅ = 71.8 years, ơ = s = 8.9 years, and z = = 2.02
8.9
f. Conclusion: Reject H0. The average life span today is greater than 70 years;
therefore, we accept the alternative hypothesis, H1: µ > 70 years.
3. The average length of time for students to register for fall classes at a certain
college has been 50 minutes with a standard deviation of 10 minutes. A new
registration procedure using modern computing machines is being tried. If a
random sample of 12 students had an average registration time of 42 minutes with
a standard deviation of 11.9 minutes under the new system, test the hypothesis
that the population mean is now less than 50 using a level of significance of (a)
0.05 and (b) 0.01. Assume the population of times to be normal.
Solution:
a. H0: µ = 50 minutes
b. H1: µ > 50 minutes
c. (a) ɑ = 0.05 (b) ɑ = 0.01
𝑥̅ −µ √12
d. Critical region: (a) t > -1.796; (b) t = -2.718; where t = s
with ʋ = 11 degrees of freedom
e. Computations: x = 42 minutes, s = 11.9 minutes, and n = 12; hence,
42−50 √12
t= = -2.33
11.9
11.9
f. Conclusion: Reject H0 at the 0.05 level of significance, but not at the 0.01 level;
this means that the true mean is likely to be less than 50 minutes, but does
not differ sufficiently to warrant the high cost that would be require to operate a
computer.
4. A course in mathematics is taught to 12 students by the conventional classroom

procedure. A second group of 10 students was given the same course by means
of programmed materials. At the end of the semester, the same examination was
given to each group. The 12 students meeting in the classroom made an average
grade of 85 with a standard deviation of 4, while the 10 students using programmed
materials made an average of 81 with a standard deviation of 5. Test the
hypothesis that the two methods of learning are equal using 0.01 level of
significance. Assume the population to be approximately normal with equal
variances.

Solution: Let µ1 and µ2 represent the average grades of all students that might take
this course by the classroom and programmed presentations, respectively.
a. H0: µ1 = µ2 or µ1 - µ2 = 0
b. H1: µ1 ≠ µ2 or µ1 - µ2 ≠ 0
c. ɑ = 0.10
1 1
(x1−x2 )− d0√ +
𝑛1 𝑛2
d. Critical region: t < -1.725, where t = s𝑝
With ʋ = 20 degrees of freedom
e. Computations: x̅1 = 85, ̅̅̅
x2 = 81
s1 = 4, s2 = 5
and n1 = 12n1 = 10
(11)(16)+(9)(25)
sp = √ = 4.478
12+10−2
1 1
[(85)−(81)−0]√ +
12 10
t= 4.478
f. Conclusion: Reject H0; the two methods of learning are not equal.
QUIZ 8
Havillah is a pharmacist. She uses her knowledge of measurement and equations

when preparing various solutions. When working with grams and millilitres, she uses the
fact 1 ml of water has a mass of 1 g. For example, to prepare 5000 ml of a solution that
is 3% dextrose, 3% of 5000 ml solution is dextrose. The number of grams of dextrose is
equivalent to 3% of 5000 grams or 150. So Havillah must use 150 g of dextrose to make
the 3% solution.
Find the number of grams of the chemical needed to make the following solution:
Chemical Total Volume of % of Chemical in Number of Grams

Solution Solution Needed
1. A 5000 ml 3%
2. B 4000 ml 4%

3. C 6000 ml 5%
4. D 7000 ml 2.5%
5. E 8000 ml 3.5%
Perform the following inferential statistics in your computer or at the internet.
1. Z- test between Means with Computer
The steps in getting z-test between means with the use of computer are as follows:
Step 1. Switch on the computer.
Step 2. Wait until Start menu appears.
Step 3. Hold the mouse. Click Start menu, click Program, and click Microsoft Excel
Step 4. Wait until after the computer displays Microsoft Excel Program
Step 5. Type the data as follows:
Cell A Cell B
1Type 8 Type 6
2 Type 10 Type 6
3 Type 10 Type 8
4 Type 10 Type 8
5 Type 8 Type 6
6 Type 8 Type 8

7 Type 8 Type 6
8 Type 10 Type 6
9 Type 10 Type 10
10 Type 8 Type 8
11 Type 8 Type 6
12 Type 10 Type 6
13 Type 10 Type 6
14 Type 8 Type 8
15 Type 8 Type 6
16 Type 8 Type 6
17 Type 10 Type 6
18 Type 8 Type 10
19 Type 8 Type 8
20 Type 10 Type 6
21 Type 8 Type 6
22 Type 8 Type 6
23 Type 10 Type 6
24 Type 8 Type 8
25 Type 8 Type 6
Step 6 Highlight the data. Click Tools menu. Click Data analysis. Note: If you
cannot get Data Analysis program, ask the Internet attendant to do it for you.
Step 7 The computer displays Analysis Tools. Click z-test: Two Sample for Means.
Click OK.
Step 8 The computer displays z-test: Two Sample for Means. In the Inoput Range
type the following:

Variable 1 Range $A1:$A25
Variable 2 Range: $B1:$B25
Hypothesized Mean Difference: 0
Variable 1 Variance = 1 (given), if not, get the variance of the variables in Range 1
(A) using the variance formula.
Variable 2 Variance = 1.6933 (given); if not get the variance of the variables in
Range 2 using the variance formula.
Use Alpha 0.01
Step 9 Click OK.
Step 10. The computer displays the result. Copy and paste the result in separate
sheet, print it and submit to your subject teacher.
2. t- Test with Computer
The steps in getting t-test: paired two-sample for means with computer are as
follows:
Step 1 to 4 same as in the Z-test.
Step 5. Enter the data as follows:
Cell A Cell B
1 90 80
2 85 81
3 78 75
4 95 85
5 88 85
6 80 77
7 93 85
8 78 76

9 86 81
10 79 76
11 87 84
12 89 80
13 88 84
14 78 75
15 94 84
16 77 75
17 90 81
18 82 79
19 81 78
20 91 81
21 83 79
22 90 80
23 88 83
24 87 83
25 79 77
Step 6. Highlight the data. Click Tools menu. Click Data Analysis.
Step 7. The computer displays Analysis Tools. Click t-Test: Paired Two-Samples for
Means. Click OK.
Step 8. The computer displays t-Test: Paired Two-Sample for Means, In Input
Variable 1: Range, type $A1: $A25. In Input Variable 2: Range, type $B1: $B25.
Type for Alpha 0.01. Click OK.
Step 9. The computer displays the result. Copy and paste the result to another
sheet, and submit to your subject teacher.

3. Analysis of Variance (ANOVA)
If you want to determine the variance among three or more variable ranges, you
have to use F-test or ANOVA Single Factor (Analysis of Variance Single
Factor). This time, we will use the computer to perform such computation for
reference.
The steps in computing F-test or ANOVA single factor with the computer are as
follows:
Steps 1 - 4, are the same as in Z-test and t-Test.
Step 5. Enter the data as follows:
Cell A Cell B Cell C
1 5 8 10
2 4 7 9
3 3 6 8
4 2 5 7
5 1 4 6
Step 6. Highlight the data. Click Tools menu. Click Data Analysis.
Step 7. The computer displays Analysis Tools. Click ANOVA: Single Factor. Click
OK.
Step 8. The computer displays Input, Type the Input Range :

$A1:$A5:$B1:$B5:$C1:$C5. Type 0.01 under Alpha
Step 9.Click OK.
Step 10.The computer displays the result. Copy and paste to another sheet, print it
and submit to your subject teacher.

REFERENCES
Books
Nocon, FP., et al. (2000). Modern Mathematics of Investment. Mandaluyong City,

Philippines, National Book Store
Calmorin, LP (2010). Research and Statistics (1st Ed.), Mandaluyong city, Philippines,
Cacho Hermanos, Inc.
Harina, RM ( 2003). Management Advisory Services (2nd Ed). Mandaluyong City,

Levy,M. & Weltz, B (2012). Retailing Management (8th Ed). 1221 Avenue of the
Americas, New York, NY, The McGraw-Hill Companies, Inc.
Madura, Jeff (2001) Introduction to Business (2nd Ed). 5101 Madison Road, Cincinnati,
Ohio, South Western College Publishing
Mariano, NDL (2016). Business Mathematics (1st Ed), Quezon City, Philippines, Rex
Publishing Company, Inc.
Nocon, FP., et al 2000. Modern Mathematics of Investment. Mandaluyong City,


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Senior High School

ST. IGNATIUS TECHNICAL COLLEGE, INC.

Highway, Barangay Poblacion, Tagoloan, Misamis Oriental, a family owned technical

Technology was granted a juridical personality by the Securities and Exchange

in Computer Technician to Computer Hardware Servicing NC II with 1,800 hours duration

of course delivery. Similarly, Diploma in Computer Programming was changed to

Programming NC IV with 1,800 duration of course delivery. SITC management has

number of hours of delivery of TESDA courses based on TESDA Training Regulations.

ST. IGNATIUS TECHNICAL COLLEGE, INC. NOT FOR SALE i

present SITC continue teaching Bookkeeping NC III to interested students.

DepEd: Senior High School

Track: Accountancy, Business and Management (ABM), and a Technical -Vocational

Track: ICT- Computer Hardware Servicing NCII effective SY 2016-2017

Sciences (HUMSS).Consequently, in March 2017, SITC management endeavored to

ST. IGNATIUS TECHNICAL COLLEGE, INC. NOT FOR SALE ii

aforementioned academic track effective SY 2017-2018.

for a Technical-Vocational Livelihood Track on Automotive Servicing, SITC management

the school to operate the aforementioned Tech-Voc Track effective SY 2019-2020.

Tech-Voc (ICT and Automotive).

ST. IGNATIUS TECHNICAL COLLEGE, INC. NOT FOR SALE iii

Vision, Mission, and Core Values

Misamis Oriental focusing on a continuing tradition of excellence in a fast-changing world.

Within a conducive and supportive school environment, we provide relevant high–quality

future endeavors. As learner-focused education community, SITC maximizes student

learning potential by providing them with specialized knowledge in traditional and

future. In partnership with families, community, government, business, industry, and

educational systems, we will achieve our goals of creating a relevant learning

Real Job, Real Life.”

ST. IGNATIUS TECHNICAL COLLEGE, INC. NOT FOR SALE iv

professional leadership, advocate continuous improvement of programs,

processes and services, and encourage a results-oriented organization to ensure

and college transfer.

• Respect – embracing diversity and individual differences, respecting others’

contributions, and everyone’s right to learn free of interruption.

• Innovation – embracing enthusiastic pursuit of new ideas and responsible risk-

• Sustainability – valuing the responsible use of resources to achieve balance

among social, economic and environmental practices.

ST. IGNATIUS TECHNICAL COLLEGE, INC. NOT FOR SALE v

St. Ignatius Technical College Inc. Legal History i-iii

General Instructions 3-4

Lesson 1 Commission and Overrides 4-10

Lesson 2 Employee Compensation: Salary, Wage, Income and Benefits 11-30

Lesson 3 Employee Compensation: Salary, Wage, Income and Benefits 11-30

Lesson 4 Payroll Deductions 31-40

Lesson 5 Business Data: Graphs and Tables 41-51

Lesson 6 Measures of Central Tendency 52-62

Lesson 7 Variability 63-72

Lesson 8 Tests of Significant Difference 73-88

ST. IGNATIUS TECHNICAL COLLEGE, INC. NOT FOR SALE vi

Congratulations for having completed successfully Module 1 of your subject

Module 2 is composed of the following lessons:

• Lesson 1 – Commissions and Overrides

ST. IGNATIUS TECHNICAL COLLEGE, INC. NOT FOR SALE 1

1. Select a place in your home that is conducive for learning.

2. Pre-condition yourself before you start reading the lesson.

studying the lessons for Business Mathematics

4. Shut off your smartphone and keep it in your closet.

6. Take note of some important points as you continue your study.

11. You are graded based on this grading system: