Bus Math-Module 6.4 Measures of Variabilty

Interpreting Data:
Measures of Variability
1
Imagine yourself
standing in a
long queue to
buy a limited
edition product.
2
Each consumer is attended
to at different time
durations.
3
To determine
how varied or
consistent the
attending times
are, we use the
concept of
measures of
variability.
4
QUEUE DILEMMA
Your favorite author is releasing a limited edition book, so

you find yourself in a long queue. Each customer completes
a transaction in an average of five minutes. How long will it
take to reach your turn if each person has no variation
time? (Assume there are 80 people ahead of you).
5
SOLUTION
Step 1: Identify what is required in the problem.

You are asked to determine the total time (T) it takes
before your turn if there are 80 people ahead of you with
an average of 5 minutes each.
6
SOLUTION
Step 2: Identify the given in the problem.

5 minutes average time for each customer (a)
0 minutes variation time (v)
80 people ahead of you (p)
7
SOLUTION
Step 3: Write the working equation.
Step 4: Substitute the given values.
8
SOLUTION
Step 5: Find the answer.
It takes a total of 400 minutes before your turn.
9
QUESTIONS TO PONDER
1. How do you define variation? What are its forms?

2. How do you interpret measures of variations?
3. How do you apply the concept of variation to a business
setting?
10
Analyze and interpret the data presented in the table using
measures of central tendency and variability and tests of
significant differences (ABM_BM11PAD-IIh-5).
11
In this lesson, you should be able to do the following:
● Differentiate various measures of variability.
● Calculate and interpret different measures of variability.
● Solve business-related problems involving measures of
variability.
12
What business insights can be generated
from measuring variability?
13
MEASURES OF VARIABILITY
a single value that describes how spread apart the values or

observations of the distribution are
14
MEASURES OF VARIABILITY
Measures of
variability
Range Standard
Variance
Deviation
15
RANGE
● The difference between

the highest and the
lowest score in the
distribution of scores
RANGE
● The simplest form of a
dispersion of the scores
16
Range
UNGROUPED DATA
Where:
R = range
H = highest value
L = lowest value
17
Range (Ungrouped Data)
Jerry waits for the bus for 20 minutes, 32

minutes, 15 minutes, 45 minutes, 18
minutes, and 28 minutes. What is the range?
18
Range (Ungrouped Data)
Solution:
The range is 30 minutes.
19
Range
GROUPED DATA
1. Determine the upper-class limit of the highest interval

to get the upper-class boundary (UCB).
UCB = Upper-class limit + 0.5
2. Determine the lower-class limit of the lowest interval to
get the lower-class boundary (LCB).
LCB = Lower-class limit - 0.5
3. Get their difference.
20
Range
GROUPED DATA
Where:
R = range
UCB = upper-class boundary of the highest
interval
LCB = lower-class boundary of the lowest interval 21
Range
PROPERTIES OF THE RANGE:
1. It is quick and easy to compute.

2. It is easily affected by extreme scores.
3. A smaller range value implies that the scores are
closer and homogeneous.
4. A larger range value means that the scores are
scattered and heterogeneous.
22
Range (Grouped Data)
What is the 30 marathon times range in the grouped

distribution below? What does it mean?
Time (minutes) Frequency
128–130 3
131–133 1
134–136 4
137–139 3
140–142 7
143–145 12
23
Solution:
1. Determine the upper-class limit of the highest interval to
get the upper-class boundary (UCB).
UCB = Upper-class limit + 0.5
UCB = 145 + 0.5
UCB = 145.5
24
Solution:
2. Determine the lower-class limit of the lowest interval to
get the lower-class boundary (LCB).
LCB = Lower-class limit – 0.5
LCB = 128 – 0.5
LCB = 127.5
25
Solution:
3. Get their difference.
Therefore, the range is 18 minutes. It means that the variation

of the time is 18 minutes.
26
VARIANCE
● The average squared

deviation of every score
VARIANCE from the mean
● It is the square of
standard deviation
27
VARIANCE
UNGROUPED DATA
1. Compute the mean value.

2. Find each score’s deviation from the mean.
3. Square each deviation from the mean and get the sum.
4. Divide the sum by n-1, where n is the number of data
present.
28
VARIANCE
UNGROUPED DATA
Where:
s2 = sample variance
x = value from the distribution
X̄ = mean value
n = number of values
29
Variance (Ungrouped Data)
1. The increases (in pesos) in cigarette taxes

in 10 months are 10, 12, 12, 15, 16, 17, 19,
20, 24, and 25. What is the sample
variance? What does it imply?
30
Solution:
31
Increase in Taxes (x) Mean (X̄) x – X̄
10 17 –7
12 17 –5
12 17 –5
15 17 –2
16 17 –1
17 17 0
19 17 2
20 17 3
24 17 7
25 17 8
32
Increase in Taxes (x) Mean (X̄) x – X̄ (x – X̄)2
10 17 –7 49
12 17 –5 25
12 17 –5 25
15 17 –2 4
16 17 –1 1
17 17 0 0
19 17 2 4
20 17 3 9
24 17 7 49
25 17 8 64
33
4. Divide the sum by n-1, where n is the number of data present.
The sample variance of the cigarette taxes is ₱25.56, which is considered to be the
average value of the squared deviation of every score from the mean value of 17.
34
VARIANCE
GROUPED DATA

2. Get the difference between the midpoint and the mean.
3. Square the difference between the midpoint and the mean.
4. Multiply the frequency to the square of the difference
between the midpoint and the mean and get the sum.
present. 35
VARIANCE
GROUPED DATA
Where:
s2 = sample variance
f = frequency
m = midpoint
X̄ = mean value
n = number of values 36
Variance (Grouped Data)
The table below shows 12 businessmen with their monthly

income (in Thousand pesos). Calculate the sample variance.
Monthly Income Frequency

(in Thousand pesos)
40–64 3
65–89 3
90–114 4
115–139 2
37
Solution:

Monthly Income Frequency Midpoint fm
(in Thousand pesos) (m)
40–64 3 52 156
65–89 3 77 231
90–114 4 102 408
115–139 2 127 254
38
Solution:
39
Solution:

Monthly Income Frequency Midpoint fm m–X̄
40–64 3 52 156 –35.42
65–89 3 77 231 –10.42
90–14 4 102 408 14.58
115–139 2 127 254 39.58
40
Solution:

Monthly Income Frequency Midpoint fm m–X̄ (m–X̄)2
40–64 3 52 156 –35.42 1254.58
65–89 3 77 231 –10.42 108.58
90–114 4 102 408 14.58 212.58
115–139 2 127 254 39.58 1566.58
41
Solution:

Monthly Income Frequency Midpoint fm m–X̄ (m–X̄)2 f(m–X̄)2
40–64 3 52 156 –35.42 1254.58 3763.74
65–89 3 77 231 –10.42 108.58 325.74
90–114 4 102 408 14.58 212.58 850.32
115–139 2 127 254 39.58 1566.58 3133.16
42
Solution:
5. Divide the sum by n-1, where n is the number of data present
and get the square root.
Therefore, the sample variance of 12 businessmen’s monthly income

is ₱733.91.
43
WHAT IS THE VARIANCE OF A DATA SET CONTAINING A
1 STORE’S INCOME ON AN AVERAGE DAY IF THE
INCOMES ARE ₱9,300, ₱12 590, ₱ 10 010, ₱ 13 440, ₱ 13
000, ₱ 9 780, AND ₱ 15 590?
Answer area
44
STANDARD DEVIATION
● describes how the scores

deviated from the mean
● considered to be the
STANDARD
DEVIATION
most stable measure of
variation
45
Standard Deviation
UNGROUPED DATA

present, and get the square root.
46
STANDARD DEVIATION
UNGROUPED DATA
Where:
s = sample standard deviation
x = value from the distribution
X̄ = mean value
47
Standard Deviation (Ungrouped Data)
1. The increases (in pesos) in cigarette taxes

in 10 months are 10, 12, 12, 15, 16, 17, 19,
20, 24,and 25.
a. What is the sample standard deviation?
b. How do you interpret the value in (a)?
48
Solution:
a. What is the sample standard deviation?
49
Increase in Taxes (x) Mean (X̄) x – X̄
10 17 –7
12 17 –5
12 17 –5
15 17 –2
16 17 –1
17 17 0
19 17 2
20 17 3
24 17 7
25 17 8
50
Increase in Taxes (x) Mean (X̄) x – X̄ (x – X̄)2
10 17 –7 49
12 17 –5 25
12 17 –5 25
15 17 –2 4
16 17 –1 1
17 17 0 0
19 17 2 4
20 17 3 9
24 17 7 49
25 17 8 64
51
4. Divide the sum by n-1, where n is the data present.
The sample standard deviation of the cigarette taxes is ₱ 5.06.

52
b. How do you interpret the value in (a)?
A value of 5.06 is the degree to which it deviates from the

mean value of 17.
53
STANDARD DEVIATION
GROUPED DATA

4. Multiply the frequency to the square of the difference between the
midpoint and the mean and get the sum.
5. Divide the sum by n-1, where n is the number of data present, and get
the square root.
54
STANDARD DEVIATION
GROUPED DATA
Where:
s = sample standard deviation
f = frequency
m = midpoint
X̄ = mean value
55
STANDARD DEVIATION
GROUPED DATA
1. It is the most stable form of variation.

2. It is affected by extreme scores.
3. A smaller standard deviation implies closer and
homogeneous values.
4. A larger standard deviation means scattered and
heterogeneous values.
56
Standard Deviation (Grouped Data)
The table below shows 12 businessmen with their monthly

income (in Thousand pesos). Calculate the sample
standard deviation and provide interpretation.
Monthly Income Frequency

(in Thousand pesos)
40–64 3
65–89 3
90–114 4
115–139 2
57
Solution:

Monthly Income Frequency Midpoint fm
40–64 3 52 156
65–89 3 77 231
90–114 4 102 408
115–139 2 127 254
58
Solution:
59
Solution:

Monthly Income Frequency Midpoint fm m–X̄
40–64 3 52 156 –35.42
65–89 3 77 231 –10.42
90–114 4 102 408 14.58
115–139 2 127 254 39.58
60
Solution:

Monthly Income Frequency Midpoint fm m-X̄ (m-X̄)2
40–64 3 52 156 –35.42 1254.58
65–89 3 77 231 –10.42 108.58
90–114 4 102 408 14.58 212.58
115–139 2 127 254 39.58 1566.58
61
Solution:

Monthly Income Frequency Midpoint fm m-x̄ (m–X̄)2 f(m–X̄)2
40–64 3 52 156 –35.42 1254.58 3763.74
65–89 3 77 231 –10.42 108.58 325.74
90–114 4 102 408 14.58 212.58 850.32
115–139 2 127 254 39.58 1566.58 3133.16
62
Solution:
5. Divide the sum by n-1, where n is the data present and get the
square root.
Therefore, the standard deviation of 12 businessmen’s monthly

income is 27.09 (in Thousand pesos). This means that 27.09 is the
degree to which it deviates from the mean value of 87.42.
63
YOU ARE INTERESTED IN KNOWING HOW PRICING FOR
2 CAR WASH SERVICES DIFFERS FROM ONE ANOTHER.
WHAT IS THE STANDARD DEVIATION IF THE COSTS ARE
LISTED AS ₱ 300, ₱ 200, ₱ 250, ₱ 280, AND ₱ 310?
Answer area
64
BUSINESS-RELATED PROBLEMS
There are many business-related problems involving the

concept of variations. Examine how the following
problems were solved.
65
Business-related Problems Involving Measures of Variability
Example 1
Vina shops at CC Supermarket for laundry essentials. In
the payment section, there are two hand-carry-only
counters. The data on the next slide shows their waiting
time (in minutes). Based on the range value, which is
more homogenous?
66
Hand-carry Counter 1 Hand-carry Counter 2
6 11
5 9
8 5
9 2
5 8
10 9
6 3
4 6 67
Solution
You are asked to determine which hand-carry-
only counter has a more homogeneous waiting
time based on its range (R) value
68

6, 5, 8, 9, 5,10, 6, 4 min. waiting time (counter 1)
11, 9, 5, 2, 8, 9, 3, 6 min. waiting time (counter 2)
69
70

For counter 1:
For counter 2:
71

For counter 1:
72

For counter 2:
Since the range value of counter 1 is smaller, we can

conclude that counter one is more homogenous in
waiting time.
73
Example 2
XX Company is set to send 5 of its employees to a week-
long seminar and training. The probable employees to be
sent are divided into two groups. The group to be sent
has less age variation based on its sample standard
deviation value. With that premise, which group goes?
74
Example 2
Group A Group B
27 25
30 28
32 24
29 30
35 29
75
Solution
You are asked to determine with less age
variation
76

27, 30, 32, 29, 35 Group 1
25, 28, 24, 30, 29 Group 2
77
78

For group 1:
For group 2:
79

For group 1:
80

For group 2:
81

With a standard deviation of 2.59, Group 2 has less age
variation than Group 1, with a 3.05 standard deviation
value. Therefore, group 2 goes to the seminar and
training.
82
AARON’S FOOD STAND HAS TWO BRANCHES. THE TOTAL
PRODUCTS SOLD FOR THE WHOLE WEEK FOR BRANCH 1 ARE
3 108, 260, 198, 156, 199, 168, AND 202, WHILE 203, 245, 278,
196, 209, 289, AND 167 FOR BRANCH 2. CONSIDER THE
STANDARD DEVIATION, WHICH BRANCH HAS ALMOST THE
SAME SALES?
Answer area
83
KAT IS ATTEMPTING TO IMPROVE THE CONSISTENCY OF HER
4 TRAVEL TIME. SHE KEPT TRACK OF 9, 10, 10, 10, 10, 11, 11, AND
12. DID SHE SUCCEED IF SHE AIMED FOR A VARIANCE OF LESS
THAN ONE MINUTE? SUPPORT YOUR ANSWER.
Answer area
84
STANDARD COSTING AND VARIANCE ANALYSIS CASE STUDY: EFFECT
OF ASSUMED STANDARD LEVELS
Harden Company's production costs have risen.

Management's primary interest is direct labor. Labor and
other costs may be controlled by using a standard cost
system. No thorough manufacturing records were kept;
hence no useful historical data were provided.
Standard Costing and Variance Analysis C

ase Study: Effect of Assumed Standard Levels Shamsa Rafique, “STANDARD
COSTING AND VARIANCE ANALYSIS CASE STUDY: EFFECT OF ASSUMED STANDARD
LEVELS,”
https://www.accountingdetails.com/standard_costing_variance_analysis_case_study.ht
m#Case%20A: 85
Harden Company hired an engineering consulting firm to set

labor guidelines. The advisors advised a labor norm of one
production unit every 30 minutes, or 16 units per day per worker.
The experts also said Harden's pay rates were below the industry
standard of $/hour. Harden's vice president of production
believed that this labor requirement was too stringent and that
12 units a day for each worker would be more acceptable.
LEVELS,”
m#Case%20A: 86
Harden Company's president believes the benchmark should motivate

workers and provide appropriate information for control and cost
comparison. Management opted for a dual standard after the significant
debate. The consulting firm's recommended labor standard of one unit
every 30 minutes would be applied in the plant, but a cost standard of 40
minutes per unit would be used in reporting. Management also decided
not to tell employees of the cost standard utilized for reporting.
LEVELS,”
m#Case%20A: 87
● A measure of variability is a single value that describes
how spread apart the values or observations of the
distribution are.
● The range, the variance, and the standard deviation are
the three most widely used measures of dispersion.
88
● Range is the difference between the highest and the
lowest score in the distribution of scores.
● The variance is the average squared deviation of every
score from the mean.
● The standard deviation describes how the scores deviated
from the mean.
89
Measure of Variability How To Obtain How To Obtain
(Ungrouped) (Grouped)
Range
Sample Variance
Sample Standard
Deviation
90
True or false?
1. The range of grouped data involves upper and lower limits.
Answer area
91
True or false?
2. Standard deviation is affected by extreme values.
Answer area
92
True or false?
3. Variance is the square root of the standard deviation.
Answer area
93
True or false?
4. A larger standard deviation implies homogeneous and

more spread values of a data set.
Answer area
94
True or false?
5. Mean value is needed in solving for standard deviation and

range.
Answer area
95
Variations on Stations
Differentiate the two gasoline stations below based on how consistent or
varied their sales are. Compute the various measures of variability.
Station 1 Station 2
Number of Sales Frequency Number of Sales Frequency
(in Liters) (f) (in Liters) (f)
79 – 88 4 89 – 101 6
89 – 98 6 102 – 114 5
99 – 108 7 115 – 127 6
109 – 118 2 128 – 140 2
119 – 128 1 141 – 153 1
96
Measures of Variability Station 1 Station 2
Range
Sample Standard Deviation
Sample Variance
97
Answer the following questions:
1. Vanessa compared the income of her two food stalls for
the whole week. For stall 1, she recorded incomes of
₱8,345, ₱9,500, ₱8,300, ₱8,895, ₱10,405, ₱8,005, and
₱12,650 while for stall 2, ₱11,045, ₱12,060, ₱9,300, ₱9,895,
₱10,305, ₱11,505, and ₱9,900. Which stall has a more
consistent income?
Answer area
98
Answer area
99
2. A teacher-vlogger creates video-lesson content on various
platforms. She is examining audience engagements to her
content. The number of engagements she recorded for the
last 10 days is the following: 205, 310, 510, 850, 423, 330,
560, 469, 810, and 745. What happens to the standard
deviation value if another engagement is added for the
11th day, which is 550?
100
Answer area
101

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Interpreting Data:

Your favorite author is releasing a limited edition book, so

Step 1: Identify what is required in the problem.

Step 2: Identify the given in the problem.

0 minutes variation time (v)

80 people ahead of you (p)

Step 3: Write the working equation.

Step 4: Substitute the given values.

It takes a total of 400 minutes before your turn.

1. How do you define variation? What are its forms?

a single value that describes how spread apart the values or

● The difference between

Jerry waits for the bus for 20 minutes, 32

The range is 30 minutes.

1. Determine the upper-class limit of the highest interval

PROPERTIES OF THE RANGE:

1. It is quick and easy to compute.

What is the 30 marathon times range in the grouped

Therefore, the range is 18 minutes. It means that the variation

● The average squared

1. Compute the mean value.

1. The increases (in pesos) in cigarette taxes

1. Compute the mean value.

The table below shows 12 businessmen with their monthly

Monthly Income Frequency

1. Compute the mean value.

90–114 4 102 408

115–139 2 127 254

1. Compute the mean value.

2. Get the difference between the midpoint and the mean.

40–64 3 52 156 –35.42

65–89 3 77 231 –10.42

90–14 4 102 408 14.58

115–139 2 127 254 39.58

3. Square the difference between the midpoint and the mean.

40–64 3 52 156 –35.42 1254.58

65–89 3 77 231 –10.42 108.58

90–114 4 102 408 14.58 212.58

115–139 2 127 254 39.58 1566.58

4. Multiply the frequency to the square of the difference

40–64 3 52 156 –35.42 1254.58 3763.74

65–89 3 77 231 –10.42 108.58 325.74

90–114 4 102 408 14.58 212.58 850.32

115–139 2 127 254 39.58 1566.58 3133.16

Therefore, the sample variance of 12 businessmen’s monthly income

● describes how the scores

1. Compute the mean value.

1. The increases (in pesos) in cigarette taxes

4. Divide the sum by n-1, where n is the data present.

The sample standard deviation of the cigarette taxes is ₱ 5.06.

b. How do you interpret the value in (a)?

A value of 5.06 is the degree to which it deviates from the

1. Compute the mean value.

1. It is the most stable form of variation.

The table below shows 12 businessmen with their monthly

Monthly Income Frequency

1. Compute the mean value.

90–114 4 102 408

115–139 2 127 254

1. Compute the mean value.

2. Get the difference between the midpoint and the mean.

40–64 3 52 156 –35.42

65–89 3 77 231 –10.42