BSA TERM

Business
01
4
Mathematics 0
BRIDGING PROGRAM 9
Fractions • Subtraction
!
} a number in the form of } to subtract two fractions, they also
"
} the denominator can never be equal to must
#$ have a Common Denominator
0. % = 𝐷𝑜𝑒𝑠 𝑛𝑜𝑡 𝑒𝑥𝑖𝑠𝑡!
Ex:
} a fraction with a numerator of 0 equals 2 1 8−3 5
% − = =
0. =0 3 4 3 × 4 12
&
} if the numerator is larger than the
denominator, it is called an improper How to Simplify Fractions?
fraction. } divide by the Greatest Common
Factor.
Operations of Fractions • A factor is a number that can be
• Multiplication divided
} to find the product, multiply the into another number with no
numerators to find the numerator of remainder. A common factor is a
the product; and multiply the factor that
denominators to find the two numbers have in common.
denominator of the product. } divide both numerator and
Ex: denominator by the Greatest
17 1 17 1 Common Factor.
𝑥 = =8
1 2 2 9
• Division
} to divide by a fraction, we turn the
fraction we are dividing by upside
down and make it a multiplication.
Ex:
3 1 3 2 6 3
÷ = × = 𝑜𝑟
8 2 8 1 8 4
• Addition
} to add two fractions, you must make
sure
they have a Common Denominator.
§ a common denominator is a
number with which both of the
denominators share at least one
factor that is not the number 1
• for example, if the
denominators are 4 and 7, then
a common denominator is 28.
28 shares the factors 1, 2 and 4
with the number 4, and the
factors 1 and 7 with the number
7.
Ex:
2 3 16 + 15 31
+ = =
5 8 5×8 40

1
 UNIT I.2: FRACTIONS, DECIMALS, AND PERCENTS

What are Fractions, Decimals, and Decimal to Fraction:

Percents? } Ex:
} fractions, decimals, and percents are
0.3 10 3
different ways of representing part of a 0.3 = × =
1 10 10
whole.
0.36 100 36 9
0.36 = × = =
Fractions 1 100 100 5
} describes part of a whole when the 3.75 100 375 15
whole is cut into equal parts. 3.75 = × = =
1 100 100 4
0.284 1000 284
Fractions can be converted into different 0.284 = × =
1 1000 100
forms;
71
=
250
Percents Decimals
Percent to Decimal:
} Divide a percent by 100 and remove
the percent sign to convert from a
percent to a decimal.
Fractions

A same value can be written in different

forms.
Ex:
1
= 0.5 = 50%
2

How to convert a fraction into a decimal:

} Divide the top of the
fraction(numerator) by the bottom
(denominator) of the fraction.

Fraction to Decimal:
} divide the numerator to the
denominator

Decimal to Percentage:
} multiply the decimal by 100

2
 UNIT I.3: PROBLEM SOLVING ON FRACTIONS

EXAMPLE 1: FOOD CART BUSINESS Conclusion:

'
A food cart sells three different The tailor purchased a total of 11( yards.
hamburgers, based on the amount of meat
used: Mini (1/4 pound); Regular (1/3 EXAMPLE 3: WOODWORKING
pound); and Maxi (1/2 pound). Students Contractor Richard Salas has a top board
bought one of each to compare them. that is 11/16 inch thick. Richard wants to
What was the total amount of meat used use wood screws to attach it to a bottom
in the three hamburgers? board. If a wood screw is 1 1/4 inches long,
Given: how much of the screw will be left over to
Mini = 1/4 pound go into the bottom board?
Regular = 1/3 pound Given:
Maxi = 1/2 pound Length of wood screw = 1 1/4 inches
Required: Thickness of top board = 11/16 inch
Total amount of meat used in the three Required:
hamburgers Length of screw that will go to the bottom
Solution: board
1 1 1 3 4 6 13 1 Solution:
+ + = + + = =1 1 11 5 11
4 3 2 12 12 12 12 12
1 − = −
4 16 4 16
Conclusion:
1 20 11
1 is the total amount of meat used −
12 in the three hamburgers. 16 16
9
EXAMPLE 2: TAILORING =
16
STA Trading sold four pieces of wool fabric
to a tailor. The pieces measured 3 1/4 Conclusion:
)
yards, 2 1/3 yards, 1 3/4 yards, and 4 1/2 inch of the screw will go to the bottom
#(
yards in length. How many yards of fabric board.
did the tailor purchase?
Given: EXAMPLE 4: PROFIT SHARING
P1 = 3 1/4 yards The profit of a milk tea business for one
P2 = 2 1/3 yards month is ₱45,000. It is shared between two
P3 = 1 3/4 yards partners, Jaime and Ramon. If Jaime
P4 = 4 1/2 yards. received 9/20 of the profit, how much
Required: money did Ramon receive?
Total amount of fabric purchased by the Given:
tailor Profit = ₱45,000
Solution: Share of Jaime = 9/20
1 1 3 1 13 7 7 9 Required:
3 +2 +1 +4 = + + + Share of Ramon
4 3 4 2 4 3 4 2
13 7 7 9 39 28 21 54
+ + + = + + +
4 3 4 2 12 12 12 12
39 + 28 + 21 + 54
12
#&$ '
#$
or 11 ( yards

3
 UNIT I.3: PROBLEM SOLVING ON FRACTIONS

Solution: rest was divided equally among his five

𝑆ℎ𝑎𝑟𝑒 𝑜𝑓 𝐽𝑎𝑖𝑚𝑒 + 𝑆ℎ𝑎𝑟𝑒 𝑜𝑓 𝑅𝑎𝑚𝑜𝑛 daughters. Determine the fraction of the
money each daughter received.
= 1 𝑆ℎ𝑎𝑟𝑒 𝑜𝑓 𝑅𝑎𝑚𝑜𝑛 Given:
= 1 − 𝑆ℎ𝑎𝑟𝑒 𝑜𝑓 𝐽𝑎𝑖𝑚𝑒 Share of wife = 3/8 of man’s money Share
9 of son = 1/2 of man’s
=1− remaining money after giving to his wife
20
Share of each daughter
20 9 = 1/5 of man’s remaining money after
= −
20 20 giving to his wife and his son
11 Required:
= Share of each daughter Computation:
20
Man’s remaining money after giving to his
Conclusion: wife = 1 − Share of wife
##
The share of Ramon is $% of ₱ 45,000 =
11/20)
(₱45,000) = ₱24,750 Solution:
EXAMPLE 5: PLUMBING 𝑆ℎ𝑎𝑟𝑒 𝑜𝑓 𝑠𝑜𝑛 = ½ of man’s remaining money
Juan bought eight pieces of copper pipe
that were each 6 3/4 inches long. What after giving to his wife
was the total length of pipe that Juan 1 5
bought? = ×
2 8
Given: 5
No. of copper pipes = 8 pieces =
16
Length of each copper pipe = 6 3/4 inches
Required: Man’s remaining money after giving to his wife
Total length of pipe that Juan bought and his son = 1−(Share of wife + Share of son)
Solution:
3 5
𝑇𝑜𝑡𝑎𝑙 𝑙𝑒𝑛𝑔𝑡ℎ 𝑜𝑓 𝑝𝑖𝑝𝑒 =1−J + K
8 16
= 𝑁𝑜. 𝑜𝑓 𝑐𝑜𝑝𝑝𝑒𝑟 𝑝𝑖𝑝𝑒𝑠
6 5
× 𝑙𝑒𝑛𝑔𝑡ℎ 𝑜𝑓 𝑒𝑎𝑐ℎ 𝑝𝑖𝑝𝑒 =1−J + K
16 16
3 16 11
=8×6 = −
4 16 16
27 5
=8× =
4 16
216 Share of each daughter = 1/5 of man’s remaining
= = 54
4
money after giving to his wife and his son
Conclusion: 1 5
The total length of the pipe that Juan bought is = ×
5 16
54 inches long.
1
=
EXAMPLE 6: INHERITANCE 16
A man left 3/8 of his money to his wife
and 1/2 of the remainder to his son. The

4
 UNIT I.3: PROBLEM SOLVING ON FRACTIONS

Conclusion:
Each daughter will receive 1/16 of their father’s
money.

EXAMPLE 7: SELLING
A sari-sari store ordered 4 trays of
medium-sized eggs at a wholesale price of
₱125 each tray. If each tray contains 2 1/2
dozen eggs, how much is the cost of each
egg?
Given:
No. of egg trays = 4 trays
Price per tray = ₱125
No. of eggs per tray = 2 1/2 dozen
Required:
Cost per egg
Solution:
1 𝑑𝑜𝑧𝑒𝑛 = 12 𝑒𝑔𝑔𝑠
1 1
2 𝑑𝑜𝑧𝑒𝑛 = 2 × 12 𝑒𝑔𝑔𝑠
2 2
5
= × 12 𝑒𝑔𝑔𝑠
2
𝑃𝑟𝑖𝑐𝑒 𝑝𝑒𝑟 𝑡𝑟𝑎𝑦
𝐶𝑜𝑠𝑡 𝑝𝑒𝑟 𝑒𝑔𝑔 =
𝑁𝑜. 𝑜𝑓 𝑒𝑔𝑔𝑠 𝑝𝑒𝑟 𝑡𝑟𝑎𝑦
125
=
30
≈ ₱4.17

Conclusion:
Each egg costs around ₱4.17

5
 UNIT 2: SALARY AND WAGE

2.1 SALARY AND WAGE know how much overtime,

is coming in and tracking
2.1.1 EMPLOYEE COMPENSATION going out. overtime can be
a bit of a
When you work for a company, you are 2. Additional challenge. An
entitled to certain financial and non- perks. Salaried hourly worker
financial rewards in exchange for the employees are would work
services you provide. This is known as entitled to a overtime and
employee compensation, which is a legal number of paid simply charges
and moral obligation of any business. days off every for the hours
Employee compensation may include year. The they worked.
wages, salaries, employee benefits number of days
including sick leave and vacation leave, and would be pre- 2. Pay cuts.
incentive pay, which includes productivity agreed with the Companies
pay, commission, override, bonus, and employer. It is going through
profit-sharing. also possible to tough financial
agree on flexible periods slash
Salary refers to a fixed payment agreed to working hours. expenses by
by an employer and an employee. If you So, employees cutting pay.
are receiving a salary, you do not need to can come in to Although waged
concern yourself with computing how work an hour or employees are
much you will receive on a payday because two earlier to more likely to
it is has already been agreed in your leave an hour or get their hours
contract. For full-time employees, salary is two later. cut, it wouldn’t
generally described in annual, monthly, bi- affect their
weekly or weekly amounts. 3. Higher wages. hourly rate as
Salary workers they only get
On the other hand, wage refers to hourly generally have paid for the
or daily payments for work done during the more hours they
working day. If you are a wage earner, you responsibilities work. While
may have to compute the number of hours compared to salary workers
you worked for the company so you will their waged might need to
receive a compensation based on your counterpart. work more
working hours. Salaried workers hours with no
might have to extra pay.
SALARIED PAY work more than
Advantages Disadvantages the standard 3. Public holiday
1. Consistency. 1. Overtime. One work-hour week pay. Like
Employees are of the main to catch up with overtime pay,
guaranteed a disadvantages deadlines. waged workers
certain amount of salaried pay is Compensation are often paid
every week or working for these more to work
month excluding overtime. responsibilities on public
bonuses. This Although is reflected in holidays like
makes financial salaried their salary. Christmas or
planning easier employees are Easter.
as they would entitled to Depending on

6
 UNIT 2: SALARY AND WAGE

the nature of employees don’t have a

business and cannot get safety net. A
contract, charged against waged
salaried any legal employee
workers might obligations like would lose out
have to work leaving before on wages if they
over holiday working the are absent from
periods without agreed upon work even for
extra pay. period. medical
WAGED PAY reasons. In most
Advantages Disadvantages 3. Less cases, they
1. Payment for 1. Working hours. responsibility. wouldn’t get
hours. An Waged workers Employees medical
advantage of an get paid working on a insurance or
hourly wage is according to the salaried basis contributions to
that employees hours they have could be liable if their pension,
get paid for the worked. This anything goes either.
hours they means they wrong within
actually work. would have to the company.
This means that work extra Waged workers
if a worker hours to earn have less
works for eight any extra pay. responsibility for
hours a day they the growth of
get paid for the 2. Hours cut. If a the company. 4.
eight hours. If an company is Immediate pay.
employee is going through Unless
asked to work financial otherwise
overtime, they’ll troubles and stated, waged
also get paid for needs to cut workers would
that as well. down on mostly get paid
expenses, in daily or weekly
2. No contract. most cases as their pay is
Waged employee hours directly related
employers are are the first to to the number of
not bound by go, which hours that
contracts. If they means a smaller they’ve worked.
find somewhere paycheck. But it While salaried
that offers more also means the employees wait
money for employee will a month to get
working the still get paid for their paycheck.
same hours they however many
can change hours they 2.1.2 COMPUTATION OF WAGE
employment. work.
Because they Wage refers to the earnings received by a
are not bound 3. Benefits. worker on a piece rate, hourly rate, or daily
by contract, Waged rate.
waged employees

7
 UNIT 2: SALARY AND WAGE

Piece Rate. If you are a worker employed 150-199 ₱107.50

on a “piecework” basis, you will be paid in 200 or more ₱110
proportion to the quantity of work you
finished. It means that the more pieces you For the week, she repacked the following
complete, the higher your wage would be. quantities:
Monday – 95; Tuesday – 102; Wednesday
There are two types of piece-rate wage: – 130; Thursday – 152; Friday – 201
fixed piece-rate plan and differential
piece-rate plan Compute for her total wage for the week.
(Observe that the rate varies depending on
In a fixed piece-rate plan, the rate for each the quantity produced.)
piece you finish is the same regardless of
quantity produced. Solution:
Divide each quantity produced by 100 and
On the other hand, in differential piece- multiply them to its corresponding rate.
rate plan, the rate increases as the Computation:
quantity produced increases. Day Quant No. of Price Sub-
ity “100 per total
Packe Packs” 100
EXAMPLE 1: Aling Minda is paid on a per-
d Packs
piece basis at the rate of ₱1.50 per pack of Monday 95 95/100=0. ₱100 ₱95.0
charcoal. If she finishes 1200 packs of 95 0
charcoal per week, how much is her total Tuesday 102 120/100= ₱105 ₱107.
earnings? 1.02 10
Wednes 130 130/100 = ₱105 ₱136.
day 1.30 50
Given:
Thursda 152 152/100 = ₱107. ₱163.
Fixed piece-rate = ₱1.50 per pack of y 1.52 50 40
charcoal Friday 201 201/100 = ₱110 ₱221.
No. of packs finished in a week = 1200 2.01 10
packs Total ₱723.
Required: 10
Total earnings per week Computation: Conclusion:
Solution: Aling Belen’s total wage for the week is
Total earnings = Quantity × Rate = 1200 × ₱723.10.
1.50 = 1800
Conclusion: Hourly Rate.
Aling Minda earns ₱1800 per week.
Many employees are paid on an hourly
basis.
EXAMPLE 2: Aling Belen is now employed
to repack and seal pepper. She is paid on To compute for the pay, simply multiply
the following differential pay plan the number of hours of work by the hourly
schedule. rate.
EXAMPLE 3: If you worked for 40 hours
Quantity Daily Rate per 100 during the week with a rate of ₱25.00 per
packs hour, what is your wage?
Less than 100 ₱100
100-149 ₱105

8
 UNIT 2: SALARY AND WAGE
Given:
Hourly rate = ₱25.00 per hour;
No. of hours worked = 40 hours
Required:
Wage for the week Computation
Solution:
Wage = Hourly rate × No. of hours worked
= 25 × 40 = 1000
Conclusion:
Your wage for the week is ₱1000.
EXAMPLE 4: Jim works as a dishwasher in a
restaurant that pays him ₱45 per hour. He
is paid every two weeks. For his payday, he
reported to work for a total of 70 hours.
How much should he receive?
Given:
Hourly rate = ₱45 per hour;
No. of hours worked = 70 hours
Required:
Jayson’s wage for two weeks Computation
Solution:
Wage = Hourly rate × No. of hours worked
= 45 × 70 = 3150
Conclusion:
Jayson should receive ₱3150.
2.2 BENEFITS OF SALARY AND
WAGE EARNERS
When you are employed, you are entitled
to various benefits that can be summed up
into three categories: employee minimum
wage and additional pays due to varying
factors like holidays or overtime, leave
benefits which are paid absence from
work, and mandatory government
contributions.
2.2.1 WAGE AND COMPENSATION
BENEFITS
A. Employee Minimum Wage. Every
region in the Philippines has a different
minimum wage. For a list of updated
minimum wage rates, visit the website
of the National Wages and Productivity
Commission.
B. Overtime Pay. The employee who
renders service beyond the schedule
indicated in the contract will be given
additional compensation equivalent to
his regular wage including at least 25%
premium.
C. Premium Pay. A premium pay is an
overtime pay for rest days and official
holidays. Employee shall be paid an
additional compensation from the rate
of the first eight hours on a holiday or
rest day plus at least 30%.
1. Regular Holidays – these refer to
fixed dates like Christmas Day,
Independence Day, or New Year’s
Day. However, National Heroes Day
and Holy Week are considered
regular holidays despite changing
dates.
2. Special Holidays – also known as
Special Non-Working Holidays, they
fall on flexible dates, depending on
the circumstance. Examples are
ASEAN Summit or regional events
like festivals or class suspensions. A
day becomes a special holiday if:
proclaimed by the President,
enacted by the Congress, or 3)
declared by LGUs in the specific
regions.
3. Double Holidays – this is a rare
occurrence wherein a regular
holiday and a special holiday fall on
the same day. Example: President
Rodrigo Duterte declared August 21,
2018 Self-Check 37 as special non-
working (Eid’l Adha) and regular
holiday (Ninoy Aquino Day) at the
same time. All employees are
eligible for premium pay, but
normally, the slots for working on
holidays or rest days are scheduled
in advance and approved by
authorized personnel
9
 UNIT 2: SALARY AND WAGE
D. Night Shift Differential. Also known as
night shift pay, it applies to employees
who work between 10:00 PM and 6:00
AM. An additional 10% premium is
applied for every hour at work.
E. 13th Month Pay. The 13-month pay is
often mistaken as the Christmas Bonus,
but technically, it’s a monetary bonus
mandated by law. The Christmas bonus
is only a voluntary gesture from the
employers. According to the law, the
13-month pay is given either in 2
installments (May and December) or in
full before December 24. You can
receive this pay if you are any private
employee with fixed or guaranteed
salary who have worked for at least
one month. Resigned or terminated
employees who left their employers
before the release of the 13-month
bonuses can also receive this. Take
note that employees who quit the job
without going through the separation
process and workers who are paid
purely on commission are not entitled
for 13-month pay.
F. Separation Pay. Separation pay is also
part of the Labor Code and is given to
employees terminated from the
company. The only exception are those
terminated because of misconduct or
crime involvement.
There are two types:
1. 1/2 Month Pay per Year of Service –
an employee is eligible for
separation pay with the value of
one-half (1/2) month pay for every
year of service if the separation from
the service is because of
retrenchment to save the company
from pitfalls, closure or termination
of the operations due to bankruptcy
and other bad instances, and grave
illness incurable within 6 months or
harmful for co-workers.
2. One-Month Pay per Year of Service
– an employee is eligible for a
separation pay worth of one month
per year of service if the termination
of the contract is because of:
installation of devices or machines
that reduce the number of labors,
redundancy, or when there is
excessive manpower, impossible
reinstatement to the former
position because of significant
reasons.
G. Retirement Pay. Upon the age of
60 years or more, an employee who
has served at the establishment for at
least five years may be granted a
retirement pay equivalent to at least
one-half month of salary for every year
of service. A fraction of at least six
months is considered as one whole
year. As stipulated by the DOLE
National Wages and Productivity
Commission, “The minimum
retirement pay shall be equivalent to
one-half (1/2) month salary for every
year of service, a fraction of at least six
(6) months being considered as one (1)
whole year.” Included in the one-half
pay are 15 days salary based on the
latest salary rate, cash equivalent of 5
days of service incentive leave, one-
twelfth (1/12) of the 13th month pay.
2.2.2 LEAVE BENEFITS
A. Service Incentive Leave. Article 95 of
the Labor Code says that an employee
who has worked for a year is entitled to
five (5) SILs with full pay. These can be
used for vacation leave or sick leave.
B. Parental Leaves. There are three types
of parental leaves:
1. Maternal – any pregnant woman
employee who has worked with the
company for at least six months will
be granted a maternity leave of at
least two weeks prior to her due
date (expected date of delivery) and
four weeks after normal delivery or
miscarriage with full pay based on
10
 UNIT 2: SALARY AND WAGE
her regular salary. As of February 21,
2019, the Expanded Maternity
Leave (EML) Bill has been signed into
law. This law grants 105 days of paid
maternity leave credits. The law also
allows new mothers to extend this
leave for an additional 30 days, but
this will be unpaid. The EML is
applicable to all a woman’s
pregnancies.
2. Paternal – the R.A No. 8187, or
Paternity Leave Act of 1996, grants
seven (7) days of fully paid leave to
married fathers. This is effective up
to the first four deliveries of the
legitimate spouse. Under the EML,
seven days of a woman’s paid
maternity leave credits can be
transferred to fathers, extending the
allowed seven-day paternity to be
extended to 14.
3. Solo Parent – Solo or single mothers
and fathers have seven days leave
with pay for every year of service, on
top of other leave privileges, e.g.
Maternity or Paternity Leave. Solo
mothers are covered by the EML, so
they also get 105 days of paid
maternity leave credits. However,
solo mothers can extend their leave
for 15 days and these should be paid
leaves.
C. Special Leave Benefits for Women.
There are two types:
1. Magna Carta for Women – this
entitles women who underwent
surgery due to gynecological
disorders to two months’ leave with
full pay, as stipulated in R.A. 9710 or
the Magna Carta of Women. This
applies to employees who have
rendered at least six months of
service with the company.
2. Leave for women and their children
who are victims of violence –
victims of violence against women,
as stipulated in R.A. 9262 or the
Anti-Violence Against Women and
Their Children Act of 2004, are
entitled to 10 days leave with full
pay.
D. Bereavement Leave. This is a three-day
additional time off from work to mourn
for the death of immediate family
members such as mother, father,
siblings, and children. It must be noted
that this is not a paid leave.
E. De Minimis Benefits. These are either
relatively small amounts of money or
leave credits that are optional for
employers to grant. Examples are
calamity leave, rice subsidy,
transportation/clothing/laundry
allowance, daily meal allowance, and
other goods that are not monetary.
2.2.3 MANDATORY GOVERNMENT
CONTRIBUTIONS
The following government contribution
will be automatically deducted from
regular employees based on their salary:
A. Social Security System. The Social
Security System serves as an insurance
program set by the government for all
wage earners from the private
institutions (the counterpart for
government employees is GSIS) in the
country. Members are required to
contribute a certain amount depending
on their salary bracket. Generally, your
monthly contribution is a shared
payment between you (EE) and your
employer (ER):
ER – 7.37% of the total contribution
EE – 3.36% of the total contribution
(deducted from the salary)
B. PhilHealth. This serves as a health
insurance program for private
employees providing financial aid
and service privileges for health
care. PhilHealth has removed the
previous salary brackets, creating a
new condensed contribution table
with P10,000 as the salary floor and
11
 UNIT 2: SALARY AND WAGE
P40,000 as the ceiling. The
computation starts at 2.75% of the
basic salary per month, and the
payment is shared by employer and
employee.
The PhilHealth benefits include:
1. Inpatient benefits
(hospitalization, facility fees, and
physician/surgeon fees)
2. Outpatient benefits (day
surgeries, radiotherapy,
outpatient blood transfusion,
primary care benefits)
3. Z benefits (financial/medical aid
for the patients with cancer and
in need of surgeries)
4. SDG related (Malaria package,
HIV-AIDS package, anti-
Tuberculosis treatment,
voluntary surgical contraception
procedures, and animal bites
treatment)
C. Pag-IBIG. Also known as the Home
Development Mutual Fund (HDMF),
Pag-IBIG is another form of national
savings program and the financing
office for affordable shelter. Again,
the total contribution is shared
between you and the employer. The
highest compensation per month
subjected to Pag-IBIG contribution is
P5,000 and it means that the
employer and employee will pay
P100 each as the maximum
contribution. Pag-IBIG lets you have
the following benefits: housing loan,
multi-purpose loan, calamity loan,
secured savings.
2.3 COMPUTATION OF OVERTIME
PAY
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. 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:
2.3.1 OVERTIME PREMIUM ON AN
ORDINARY DAY
Article 87 of the Labor Code provides that
work may be performed beyond eight (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 25% thereof.
EXAMPLE 5: The regular daily rate of
Jennie is ₱340.00. If she works 11 hours on
a regular day, what is her total earnings?
Solution:
i. Compute the regular hourly rate.
Regular hourly rate = Daily wage rate ÷ 8
hours = 340 ÷ 8 hours = 42.50 per hour
ii. Compute the overtime premium.
Overtime Premium = 42.50 × 0.25 = 10.625
iii. Compute the overtime rate.
Overtime rate = Regular hourly rate +
Overtime Premium
= 42.50 + 10.625
= 53.125 per hour
iv. Compute the overtime pay.
Overtime pay = Overtime rate × Excess
hours over the regular working hours
= 53.125 × 3 hours
= 159.375
v. Compute the total pay for the day.
Total pay = Daily Wage Rate + Overtime
pay
12
 UNIT 2: SALARY AND WAGE
= 340 + 159.375
= 499.375
Conclusion:
Jennie will receive a total of ₱499.375 for
that day.
2.3.2 OVERTIME PREMIUM ON REST DAY
AND SPECIAL DAY
Article 93 of the Labor Code provides that
when 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 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. The
employee is entitled the same additional
compensation if he/she is made to work on
a special day like Maundy Thursday or
Good Friday. In addition, Article 87 of the
Labor Code provides that 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.
EXAMPLE 6: Rose’s regular rate is ₱340,
which is ₱42.50 per hour. She was
requested to work on Saturday, her rest
day. Compute for her total earnings if she
worked for 10 hours.
Solution:
a) For 8 hours:
i. Compute the hourly rate on rest day or
special day.
Hourly rate = Regular hourly rate × 1.30
= 42.50 × 1.30
= 55.25 per hour
ii. Compute the total earnings.
Total earnings = Hourly rate × 8 hours =
55.25 × 8 = 442
Conclusion:
Rose’s earnings for 8 hours is ₱442.
b) For 2 hours: (to complete the 10-hour
work)
i. Compute the overtime rate.
Overtime rate = Hourly rate on rest day or
special day × 1.30
= 55.25 × 1.30
= 71.825 per hour
ii. Compute the overtime pay.
Overtime pay = Overtime rate × 2 hours
= 71.825 × 2
= 143.65
iii. Compute the total earnings.
Total earnings = Earnings for the first 8
hours + Overtime pay
= 442 + 143.65
= 585.65
Conclusion:
Rose’s total earnings is ₱585.65.
2.3.3 OVERTIME PREMIUM ON REST DAY
WHICH FALLS ON A SPECIAL DAY.
Article 94 of the Labor Code provides that
work on a rest day which falls on a special
day shall be paid
of the regular hourly rate.
EXAMPLE 7: Zeny earns the regular daily
rate of ₱340, 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. Compute her total
earnings if a) she worked for 8 hours; and
b) she worked for 10 hours.
Solution:
a) For 8 hours:
i. Compute the hourly rate on rest day
which falls on a special day.
Hourly rate on rest day which falls on a
special day = Regular hourly rate × 1.50
= 42.50 × 1.50
= 63.75 per hour
ii. Compute the total earnings.
Total earnings = Hourly rate on rest day
which falls on a special day × 8 hours
= 63.75 × 8 = 510
13
 UNIT 2: SALARY AND WAGE
Conclusion:
Zeny’s total earnings is ₱510.
b) For 10 hours:
i. Compute the overtime rate.
Overtime rate = Hourly rate on rest day
which falls on special day × 1.30
= 63.75 × 1.30
= 82.875 per hour
ii. Compute the overtime pay.
Overtime pay = Overtime rate × 2 hours
= 82.875 × 2 = 165.75
iii. Compute the total earnings.
Total earnings = Earnings for the first 8
hours + Overtime pay
= 510 + 165.75
= 675.75
Conclusion:
Zeny’s total earnings is ₱675.75.
2.3.4 OVERTIME PREMIUM ON A
REGULAR HOLIDAY
Article 94 of the Labor Code provides that
work on a regular holiday shall be paid
200% of regular hourly rate.
EXAMPLE 8: Eastern earns the regular daily
rate of ₱340 giving her an hourly rate of
₱42.50. She was requested by her boss to
work on May 1, Labor Day. Computer her
total earnings if a) she worked for 8 hours,
and b) she worked for 10 hours.
Solution:
a) For 8 hours:
i. Compute the hourly rate on regular
holiday.
Hourly rate on regular holiday = Regular
hourly rate × 2.00
= 42.50 × 2.00 = 85 per hour
ii. Compute the total earnings.
Total earnings = Hourly rate on regular
holiday × 8 hours = 85 × 8 = 680
Conclusion:
Easter’s total earnings is ₱680.
b) For 10 hours:
i. Compute the overtime rate.
Overtime rate = Hourly rate on regular
holiday × 1.30
= 85 × 1.30
= 110.50 per hour
ii. Compute the overtime pay.
Overtime pay = Overtime rate × 2 hours
= 110.50 × 2
= 221
iii. Compute the total earnings.
Total earnings = Earnings for the first 8
hours + Overtime pay
= 680 + 221
= 901
Conclusion:
Easter’s total earnings is ₱901.
2.3.5 OVERTIME PREMIUM ON A REST
DAY WHICH FALLS ON A REGULAR
HOLIDAY
Article 94 of the Labor Code provides that
work on a rest day which falls on a regular
holiday shall be paid 260% of regular
hourly rate.
EXAMPLE 9: Arlyn earns the regular daily
rate of P340.00 giving her an hourly rate of
P42.50. She was requested by her boss to
work on December 30, Rizal Day, which is
a regular holiday. However, Rizal Day fell
on Monday, which was Arlyn’s rest day.
Compute for her total earnings if a) she
worked for 8 hours, and b) she worked for
10 hours.
Solution:
a) For 8 hours:
i. Compute the hourly rate on rest day
which falls on a regular holiday.
Hourly rate on rest day which falls on a
regular holiday = Regular hourly rate × 2.60
= 42.50 × 2.60
= 110.50 per hour
ii. Compute the total earnings.
Total earnings = Hourly rate on a rest day
which falls on a regular holiday × 8 hrs.
14
 UNIT 2: SALARY AND WAGE
= 110.50 × 8
= 884
Conclusion:
Arlyn’s total earnings is ₱884.
b) For 10 hours:
i. Compute the overtime rate.
Overtime rate = Hourly rate on a rest day
which falls on regular holiday × 1.30
= 110.50 × 1.30
= 143.65 per hour
ii. Compute the overtime pay.
Overtime pay = Overtime rate × 2 hours
= 143.65 × 2
= 287.30
iii. Compute the total earnings.
Total earnings = Earnings for the first 8
hours + Overtime pay
= 884 + 287.30
= 1171.30
Conclusion:
Arlyn’s total earnings is ₱1171.30
UNIT SUMMARY:
• Employee compensation, which is a
legal and moral obligation of any
business, refers to financial and non-
financial rewards in exchange for the
services an employee provides. It may
include wages, salaries, employee
benefits including sick leave and
vacation leave, and incentive pay, which
includes productivity pay, commission,
override, bonus, and profit-sharing.
• Salary refers to a fixed payment agreed
to by an employer and an employee.
• Wage refers to hourly or daily payments
for work done during the working day.
• There are advantages and
disadvantages to being a salary earner
and wage earner.
• Wage may be earned by a worker on a
piece rate, hourly rate, or daily rate
basis.
• In a “piecework” basis, an employee will
be paid in proportion to the quantity of
work he/she finished.
• There are two types of piece-rate wage:
fixed piece-rate plan and differential
piece-rate plan. In a fixed piece-rate
plan, the rate for each piece you finish
is the same regardless of quantity
produced. On the other hand, in
differential piece-rate plan, the rate
increases as the quantity produced
increases.
• To compute for the pay on an hourly
basis, simply multiply the number of
hours of work by the hourly rate.
• An employee is entitled to various
benefits that can be summed up into
three categories: employee minimum
wage and additional pays due to varying
factors like holidays or overtime, leave
benefits which are paid absence from
work, and mandatory government
contributions.
• Wage and compensation benefits
include: employee minimum wage,
overtime pay, premium pay, night shift
differential, 13th month pay, separation
pay, and retirement pay.
• Leave benefits include: service incentive
leave, parental leaves, special benefits
for women, bereavement leave, and de
minimis benefits.
• Mandatory government contributions
include: Social Security System,
Government Service Insurance System,
PhilHealth, Pag-IBIG.
• 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, 46 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.
• Employees who work more than the
required number of hours are entitled
to overtime pay. Overtime premium
15
 UNIT 2: SALARY AND WAGE

refers to the excess payment over the

regular rate.
• Article 87 of the Labor Code provides
that work may be performed beyond
eight (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 25%
thereof. In addition, Article 87 provides
that 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.
• Article 93 of the Labor Code provides
that when 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 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. The
employee is entitled the same
additional compensation if he/she is
made to work on a special day like
Maundy Thursday or Good Friday.
• Article 94 of the Labor Code provides
that work on a rest day which falls on a
special day shall be paid 150% of the
regular hourly rate.
• Article 94 of the Labor Code also
provides that work on a regular holiday
shall be paid 200% of regular hourly
rate.
• Article 94 of the Labor Code further
provides that work on a rest day which
falls on a regular holiday shall be paid
260% of regular hourly rate.

16
 UNIT 3: PRESENTATiON AND ANALYSiS OF BUSiNESS DATA
Business data refers to information that is
captured and stored by a business as a
digital asset that may support strategy,
decision-making, and day-to-day
operations.
As a businessman, it is wise to keep
different information related to your
operations in order to make better
decisions in the future.
Two sources of business data:
1. Primary source which you can obtain
by observing your environment (clients,
competitors, etc.), networking,
interviewing clients, or by performing
experiments.
2. Secondary source which you can obtain
from business directories, existing
demographic data shared by
government and private agencies, and
existing marketing research.
Whatever is the source, it is very important
that the business data being analyzed is
appropriate with the practical or research
question being answered.
Below is an example of a business data,
which represents the monthly salary of 12
full-time employees in a certain company:
₱15,000 ₱15,500 ₱17,250 ₱18,000
₱18,500 ₱14,250 ₱15,000 ₱16,250
₱16,500 ₱19,000 ₱17,000 ₱16,000
Business data are usually messy and
difficult to understand and describe in
their raw form. That is why it is important
that you are capable of handling and
analyzing data.
Data collected must be summarized or
presented so that it can be more
understandable and further analysis can be
formulated. It can be presented through
textual form, tabular form, and graphical
form.
Textual form is incorporated with
paragraphs of discussions. This can be used
if there are only few numbers in the data
and if there is a need to comment and
compare the data collected.
Tabular form - presenting the data
through tables, a way of classifying
numerical facts into horizontal(rows) and
vertical(columns) arrays such as
contingency tables and frequency
distribution tables.
Example here: Hospital No. of
Unit Patients
Cardiac Care 1052
Emergency 2245
Intensive 340
Care
Maternity 552
Surgery 4630
Total no. of 8819
Patients
Business data are often presented in
tabular form using frequency distribution.
The frequency (𝑓) of a particular
observation is the number of times the
observation occurs in the data set.
Frequency distribution can show either the
actual number of observations falling in
each range or the percentage of
observations.
There are two types of frequency
distribution, frequency distribution for
ungrouped data and for grouped data.
Ungrouped frequency distribution shows
the frequency of individual observations in
a data set; while a frequency distribution
for grouped data shows the frequency of
observations given in intervals.
EXAMPLE 1: Create an ungrouped
frequency distribution for the given data
set which shows the number of years 12
17
 UNIT 3: PRESENTATiON AND ANALYSiS OF BUSiNESS DATA

employees of Lamyerda Imports, Inc. has 29-34 8

worked for the company.
1 3 6 4 5 6 3 4 6 3 6 4 • In a frequency distribution, we have the
Solution: class intervals. Each class interval or
First, we will count up the data by making referred to as class limits has its lower
a tally. limit and the upper limit.
No. of Years Tally • For the interval 11-16, the smaller
1 I number, 11, is the lower limit and the
3 III larger number, 16, is the upper limit.
4 IIII • In each class interval, we have also the
5 I class boundaries, the lower-class
6 IIII boundary and the upper-class boundary.
• For the interval 11-16. 10.5 is the lower-
Next, we add a column for the frequency, class boundary and 16.5 is the upper-
this will simply be the number of tick marks class boundary which is the lower-class
for each data point. We will also total the boundary of the next class interval.
number of data points. • So, if we are going to identify the
No. of Tally Frequency lower-class boundaries, we will
Years have: 4.5; 10.5; 16.5; 22.5; and
1 I 1 28.5. While the upper-class
3 III 3 boundaries are: 10.5; 16.5; 22.5;
4 III 3 29.5 and 34.5.
5 I 1
6 IIII 4 Class boundaries are always carried out to
Total 12 one more decimal place than the recorded
observations so as to ensure that no
Next, we add a column for the frequency, observation can fall precisely on a class
this will simply be the number of tick marks boundary and thereby avoids any
for each data point. We will also total the confusion as to which class interval the
number of data points. observation belongs.
No. of Tally Frequency Relative
Years Frequency The number of observations that falls in a
1 I 1 8.33% particular class interval is called class
3 III 3 25.00% frequency and is denoted by f.
4 III 3 25.00%
5 I 1 8.33% EXAMPLE 2: Create a grouped frequency
distribution for the given data set which
6 IIII 4 33.33%
shows the ages of 20 workers of 5 J’s
Total 12 100.00%
Corporation:
26 18 21 34 18 37 22 27 22
Sample of a grouped data frequency
30
distribution:
25 25 37 29 20 24 28 32 33
Class Intervals Frequency (𝑓)
18
5-10 7
11-16 12 Solution:
17-22 10 i. Determine the range(R) of the data set.
26-28 5 R = Highest Value − Lowest Value

18
 UNIT 3: PRESENTATiON AND ANALYSiS OF BUSiNESS DATA

R = 37 − 18 = 19 v. Tally the observations.

ii. Determine the number of classes or Classes Tally
intervals (k), using the formula: 18-22 IIIII-II
𝑁𝑜. 𝑜𝑓 𝑐𝑙𝑎𝑠𝑠𝑒𝑠 (𝑘) 23-27 IIIII
= V𝑁𝑜. 𝑜𝑓 𝑜𝑏𝑠𝑒𝑟𝑣𝑎𝑡𝑖𝑜𝑛𝑠 28-32 IIII
Hence, 33-37 IIII
𝑁𝑜. 𝑜𝑓𝑐𝑙𝑎𝑠𝑠𝑒𝑠(𝑘)
= V𝑁𝑜. 𝑜𝑓 𝑜𝑏𝑠𝑒𝑟𝑣𝑎𝑡𝑖𝑜𝑛𝑠 vi. Build additional columns for frequency
= √20 and relative frequency.
≈ 4.47 ⟹ 4 Classes Tally Frequency Relative
*Rounded-off to the nearest whole Frequency
number. 18-22 IIIII- 7 35%
iii. Calculate the class size (i), using the II
formula: 23-27 IIIII 5 25%
m i = R/k 28-32 IIII 4 20%
Hence, 33-37 IIII 4 20%
i = 19/4 = 4.75 ≈ 5 Total 20 100%
Since we need to include all points, we
always take the next highest integer from Graphical form – presenting the numerical
that which was computed to get the length data through graphs or charts, such as line
of our interval. graph, bar graph, pie chart or circle graph,
iv. Start writing now the classes, using the pictographs, statistical maps, and others.
lowest value in the raw data as the lowest
lower limit; and from it write the next 3.3 MEASURE OF CENTRAL
lower limit for the next class by adding the TENDENCY AND VARIABILITY
class size i=5; once the lower limit is In data analysis, you are sometimes
determined, add to it again the i =5 to interested to describe a data set using a
identify the next lower limit; and you will single number.
be doing the same thing to identify the
next the lower limits until you reach the This can be achieved by using measures of
number of classes(k); for this example, central tendency and measures of
k=4, so there are 4 classes only. However,
variability.
if after coming up with the number of
classes and yet the highest value is not
accommodated within the last class, you
3.3.1 MEASURES OF CENTRAL TENDENCY
need to add 1 more class in order to
The measures of central tendency (or
accommodate the highest value. Hence,
measures of center) refer to summary
the classes:
measures that attempt to describe a whole
Classes set of data with a single value that
Lowest Lower Limit 18-22 represents the middle or center of its
23-27 distribution.
18 + 5 = 23
28-32
23 + 5 = 28 33-37 The three common measures of central
tendency are mean, median, and mode.

19
 UNIT 3: PRESENTATiON AND ANALYSiS OF BUSiNESS DATA
3.3.1.1 MEAN
The mean is the average of the data points,
it is denoted by 𝑥̅. To calculate the mean,
∑+
use the formula: 𝑥̅ = , , where 𝑥 refers to
each observation and 𝑛 is the number of
observations in the data set.
EXAMPLE 3: Compute the mean of the
given the data set: 10, 15, 13, 25, 22, 53,
and 47.
Solution:
∑𝑥
𝑥̅ =
𝑛
10 + 15 + 13 + 25 + 22 + 53 + 47
= situation occurs if the number of modes
7
185
=
7
𝑥̅ ≈ 26.43
3.3.1.2 MEDIAN
The median is the observation in the
middle of the data set when all of the
observations are arranged in order (high to
low or low to high).
To find where it is, we take into account
the number of observations:
• If the number of observations is odd,
divide the number of observations by 2
and then round up to the next integer;
the resulting integer is the location of
the median.
• If the number of observations is even,
there are two middle values. We take
the number of observations and divide
by 2, this integer is the first of the two
middles; the next one is also a middle.
Now we average these two middle
values to get the median.
EXAMPLE 4: Find the median of these data
set: 3, 4.5, 7, 8.5, 9, 10, 15.
Solution:
There are 7 observations and 7/2 = 3.5 so
the median is the 4th number, 8.5.
EXAMPLE 5: Find the median of these data
set: 3, 4.5, 7, 8.5, 9, 10, 15, 15.5.
Solution:
There are 8 observations and 8/2 = 4 so
the median is the average of the 4th and 5th
data point, (8.5 + 9)/2 = 8.75. This data set
has a median of 8.75.
3.3.1.3 MODE
The mode is the observations which occurs
most frequently. It is possible to have more
than one mode, if there are two modes the
data is said to be bimodal. It is also possible
for a set of data to not have any mode; this
gets to be “too large”.
EXAMPLE 6: Find the mode of the data set:
4, 2, 4, 3, 2, 2.
Solution:
The mode of the data set is 2 because it
occurs three times, which is more than any
other number.
By now, you should know how to calculate
mean, median and mode. They each give
us a measure of central tendency (i.e.
where the center of our data falls), but
often they give different answers. So how
do we know when to use each?
Here are some general rules:
• Mean is the most frequently used
measure of central tendency and
generally considered the best measure
of it. However, there are some
situations where either median or mode
are preferred.
• Median is the preferred measure of
central tendency when:
1. There are a few extreme
observations in the distribution of
the data. Remember that a single
outlier can have a great effect on the
mean.
20
 UNIT 3: PRESENTATiON AND ANALYSiS OF BUSiNESS DATA

2. There are some missing or shows each observation and their

undetermined values in your data. difference with the mean. The difference
3. There is an open-ended distribution. 𝑥− 𝑥̅ is called a deviation.
For example, if you have a data field 𝑥 𝑥 − 𝑥̅
which measures number of children 10 10 – 26.43 = -16.43
and your options are 0, 1, 2, 3, 4, 5 15 15 – 26.43 = -11.43
or “6 or more,” then the “6 or more 13 13 – 26.43 = -13.43
field” is open ended and makes 25 25 – 26.43 = -1.43
calculating the mean impossible, 22 22 – 26.43 = -4.43
since we do not know exact values 53 53 – 26.43 = 26.57
for this field. 59 4. You have data 47 47 – 26.43 = 20.57
measured on an ordinal scale.
• Mode is the preferred measure when Next, square the deviations of the
data are measured in a nominal observations from the mean.
(categorical) scale. 𝑥 𝑥 − 𝑥̅ (𝑥 − 𝑥̅)2
10 10 – 26.43 (-16.43)2 =
3.3.2 MEASURES OF VARIABILITY = -16.43 269.94
The measures of variability are summary 15 15 – 26.43 (-11.43)2 =
measures that represent the amount of = -11.43 130.64
dispersion in a dataset. They give a picture 13 13 – 26.43 (-13.43)2 =
of how spread out your data set. = -13.43 180.36
25 25 – 26.43 (-1.43)2 =
In this section, we will focus on two
= -1.43 2.04
important measures of variability, namely
22 22 – 26.43 (-4.43)2 =
variance and standard deviation.
= -4.43 19.62
53 53 – 26.43 (26.57)2 =
3.3.2.1 VARIANCE
= 26.57 705.96
The variance and its related measure, the
47 47 – 26.43 (20.57)2 =
standard deviation, is arguably the most
= 20.57 423.12
important statistics. They are used to
measure variability and also play a vital
Get the sum of the squared deviations.
role in almost all statistical inference
𝑥 𝑥 − 𝑥̅ (𝑥 − 𝑥̅)2
procedures.
10 10 – 26.43 (-16.43)2 =
Variance, denoted by σ2, can be = -16.43 269.94
computed using the formula: 𝜎 $ = 15 15 – 26.43 (-11.43)2 =
∑(+.+̅)! = -11.43 130.64
,.#
, where 𝑥̅ refers to each 13 13 – 26.43 (-13.43)2 =
observation, 𝑥̅is the mean of the data set, = -13.43 180.36
and 𝑛 is the number of observations. 25 25 – 26.43 (-1.43)2 =
= -1.43 2.04
EXAMPLE 7: Compute the variance of the 22 22 – 26.43 (-4.43)2 =
data set: 10, 15, 13, 25, 22, 53, and 47. = -4.43 19.62
53 53 – 26.43 (26.57)2 =
Solution: = 26.57 705.96
First, compute the mean of the data set. 47 47 – 26.43 (20.57)2 =
Recall in Example 3 that the mean for this = 20.57 423.12
data set is 26.43. Then draw a table that

21
 UNIT 3: PRESENTATiON AND ANALYSiS OF BUSiNESS DATA
^(𝑥 − 𝑥̅)$ 1731.71
Plug in these values in the formula for
obtaining the variance.
∑(𝑥 − 𝑥̅)$
$
𝜎 =
𝑛−1
1731.71
=
7−1
1731.71
= Advertising
6
𝜎$
= 288.62
3.3.2.2 STANDARD DEVIATION
The standard deviation, denoted by the
Greek letter “sigma” (𝜎), is a measurement
of how much the observations vary from
the mean. It can be obtained by taking the
square root of the variance. A lower
standard deviation means that the data is
more clustered around the mean and
hence the data set is more consistent.
∑(+.+̅)!
𝜎$ = _ ,.#
, where 𝑥̅ refers to each
observation, 𝑥̅is the mean of the data set,
and 𝑛 is the number of observations.
Standard deviation is a more popular
measure of variability because it has the
same unit as the mean.
EXAMPLE 8: Compute the standard
deviation of the data set: 10, 15, 13, 25, 22,
53, and 47.
Solution:
Recall from Example 7 that the variance of
the given data set is 288.62. To obtain the
standard deviation, we simply get the
square root of this number.
𝜎 = √288.62, hence, 𝜎 = 16.99
3.4 LINEAR REGRESSION
Linear regression is a technique used for
predicting the value of one variable
(outcome or dependent variable) when
there is available information about its
relationship with another variable
(predictor or independent variable).
Suppose that you have the following data
set which shows the sales of a company
after investing in advertising campaigns.
Sales
₱23,000 ₱651,000
₱26,000 ₱762,000
₱30,000 ₱856,000
₱34,000 ₱1,063,000
₱48,000 ₱1,298,000
₱52,000 ₱1,421,000
Notice from the table above that as the
company invests more in advertising, the
sales also rise up. Thus, we can say that
there is a linear relationship between the
two variables, Advertising being the
predictor or independent variable and
Sales being the outcome or dependent
variable.
(Note that “linear” may also mean that as
the values in one variable increases, the
values in the other variable decreases.)
Because there is an available information
about the relationship between
advertising and sales, you can use linear
regression to predict the sales when a
certain amount of money is invested in
advertising! Regression computations are
usually handled by a software package or a
graphing calculator.
In this section, however, we will do the
computations manually. The equation for
linear regression, which we will use for
prediction, is given by: 𝑦 = 𝑎 + 𝑏𝑥, where 𝑦
is the outcome or dependent variable, 𝑥 is
the predictor or independent variable, 𝑎 is
22
 UNIT 3: PRESENTATiON AND ANALYSiS OF BUSiNESS DATA

the intercept (the value of 𝑦 when 𝑥̅ = 0), 𝑥 𝑦 4. product Square

and 𝑏 is the slope of the line. s of 𝑥 of 𝑥
and 𝑦 values:
The values of 𝑎 and 𝑏 can be obtained by (𝑥)2
the following formulas: 23 651 14,973 529
11 26 762 19,973 676
i. 𝑏 = 11"# 30 856 25,680 900
""
34 1,063 36,142 1,156
ii. 𝑎 = 𝑦` − 𝑏𝑥̅
48 1,298 62,304 2,304
∑+∑2 52 1,421 73,892 2,704
iii. 𝑆𝑆+2 = ∑ 𝑥𝑦 − , 1. Sum 3. Sum 5. Sum of 6. Sum
(∑ +)! of 𝑥 of the of
iv. 𝑆𝑆++ = ∑ 𝑥 $ − , values: values product of square
EXAMPLE 9: Using the data set below, $𝑥 of 𝑦: 𝑥 and 𝑦 d
derive the regression equation that can $𝑦 values: values
= 213 of 𝑥:
best describe the relationship between 2. = 6,051 $ 𝑥𝑦 "
advertising and sales. Predict the sales the Square = 232,803 $(𝑥)
company will make if it will invest ₱60,000 of the = 8,269
it advertising. sum 𝑥
values:
"
Advertising Sales 2$ 𝑥3
₱23,000 ₱651,000 = 45,369
₱26,000 ₱762,000
₱30,000 ₱856,000 We can now plug in the values we obtain
₱34,000 ₱1,063,000 from the table above in our formula for
₱48,000 ₱1,298,000 solving the slope b.
₱52,000 ₱1,421,000 𝑆𝑆+2
𝑏=
𝑆𝑆++
Solution:
Let Advertising be the variable 𝑥 since it is ∑𝑥∑𝑦
∑ 𝑥𝑦 −
= 𝑛
assumed to predict Sales, which we will let (∑ 𝑥)$
be our variable 𝑦. ∑ 𝑥$ −
𝑛
𝑥 (in thousands) 𝑦 (in thousands)
(213)(6,051)
23 651 232,803 − 6
26 762 =
(45,369)
30 856 8,269 − 6
34 1,063 232,803 − 214,810.5
48 1,298 =
8,269 − 7,561.5
52 1,421
17,992.5
Next, we solve for the value of 𝑎 by getting =
the following values: 707.7
1. Sum of 𝑥 values 𝑏 = 25.43
2. Square of the sum of 𝑥 values
3. Sum of 𝑦 values
4. Product of 𝑥 and 𝑦 values
5. Sum of the product of 𝑥 and 𝑦 values
6. Sum of the squared 𝑥 values

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 UNIT 3: PRESENTATiON AND ANALYSiS OF BUSiNESS DATA

To solve for the intercept 𝑎, we compute government and private agencies, and
the mean of the 𝑥 values and the 𝑦 values: existing marketing research.
• Business data are often presented in
∑𝑥 ∑𝑦 tabular form using frequency
𝑥̅ = 𝑦` =
𝑛 𝑛 distribution. The frequency (f) of a
213 6051 particular observation is the number of
= = times the observation occurs in the data
6 6
set. Frequency distribution can show
= 35.5 = 1,008.5 either the actual number of
observations falling in each range or the
We substitute these values into our percentage of observations.
equation 𝑎 = 𝑦` − 𝑏𝑥̅. Let’s take for • There are two types of frequency
example the pair (23,651). distribution, namely ungrouped and
𝑎 grouped. Ungrouped frequency
= 𝑦` distribution shows the frequency of
− 𝑏𝑥̅ individual observations in a data set,
= 1,008.5 − 25.43(35.5) while grouped data shows the
= 1,008.5 − 902.765 frequency of observations given in
𝑎 = 105.7 intervals.
Hence, our regression equation is 𝑦 = 105.7 • While using tables to present business
+ 25.43𝑥̅. data helps for a more organized
presentation, business data are more
We can use this equation to predict the often better understood when
sales of the company if it invests ₱60,000 presented in the form of graphs. A graph
in advertising. can be defined as a pictorial
y = 105.7 + 25.43(60) = 105.7 + 1525.8 = representation or a diagram that
1631.5 represents data or values in an
organized manner.
Therefore, the company will generate sales
• The three most commonly used graphs
worth ₱1,631,500 if it will invest ₱60,000 include line graphs, bar graphs, and pie
in advertising. graphs (or pie charts). o Line graphs.
Line graphs are used to track changes
UNIT SUMMARY: over short and long periods of time.
• Business data refers to information that When smaller changes exist, line graphs
is captured and stored by a business as are better to use than bar graphs. Line
a digital asset that may support graphs can also be used to compare
strategy, decision-making, and day-to- changes over the same period of time
day operations. for more than one group. 66 o Bar
• There are two sources of business data. graphs. Bar graphs are used to compare
The first is primary source which is things between different groups or to
obtained by observation networking, track changes over time. However,
interviewing clients, or by performing when trying to measure change over
experiments. The second is secondary time, bar graphs are best when the
source which can be obtained from changes are larger. o Pie graphs. Pie
business directories, existing graphs are best to use when you are
demographic data shared by trying to compare parts of a whole. They
do not show changes over time.

24
 UNIT 3: PRESENTATiON AND ANALYSiS OF BUSiNESS DATA

• Data interpretation is drawing information about its relationship

conclusions and inferences from a with another variable (predictor or
comprehensive data presented independent variable).
numerically either in tabular form or
graphical form. To interpret data means
to ask what your data is telling you.
• The measures of central tendency (or
measures of center) refer to summary
measures that attempt to describe a
whole set of data with a single value
that represents the middle or center of
its distribution. The three common
measures of center are mean, median,
and mode.
• The mean is the average of the data
points.
• The median is the observation in the
middle of the data set when all of the
observations are arranged in order (high
to low or low to high).
• The mode is the observations which
occurs most frequently. It is possible to
have more than one mode, if there are
two modes the data is said to be
bimodal. It is also possible for a set of
data to not have any mode; this
situation occurs if the number of modes
gets to be “too large”.
• The variance and its related measure,
the standard deviation, is arguably the
most important statistics. They are used
to measure variability and also play a
vital role in almost all statistical
inference procedures.
• The standard deviation, denoted by the
Greek letter “sigma” (σ), is a
measurement of how much the
observations vary from the mean. It can
be obtained by taking the square root of
the variance. A lower standard
deviation means that the data is more
clustered around the mean and hence
the data set is more consistent.
• Linear regression is a technique
used for predicting the value of one
variable (outcome or dependent
variable) when there is available

25