Discussion

Explanation:

The average age of the Marketing department is 35 years and that of the HR department is 45 years. So, the employee is being transferred from a department with a lower average age to one with a higher average age, which means that he gets an additional allowance of 10% of basic pay over his current allowance.

His current allowance = 80% of 8000 = 6400

Therefore, his new allowance = 6400 + 10% of 8000 = 6400 + 800 = 7200

After the transfer, his gross pay = 8000 + 7200 = 15200

Initially, the average gross pay of the HR department = 5000 + 70% of 5000 = 8500

The new average gross pay of the HR department (i.e. after the transfer of the 40-yr old)

$=\frac{8500\times 5+15200}{6}=\frac{57700}{6}\approx 9617$

∴ The percentage change in the average gross pay of the HR department

$=\frac{9617-8500}{8500}$ × 100 ≈ 13.13%

Hence, option (c).

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