As a newly hired compensation analyst, youve been asked by the Director of Compensation to assist with the preparation of next years compensation plan The period for the compensation plan is January 1 December 31, 2015 Your assignment is to update salary survey data using the CPI U to estimate new salary information Also, assume that it is July 1, 2014, and you have been asked to submit your analysis within the next two days The salary survey data were current through the end of 2013, and the initial average salary reported for accountant jobs in the survey was $50,000 The salary data will be 12 and 24 months old at the pay plans implementation (on January 1, 2015) and end (December 31, 2015), respectively You have been provided the national CPI U data, which were obtained from the BLS website Year Jan Feb Mar Apr May Jun 2009 211 933 212 705 212 495 212 709 213 022 214 726 2010 217 488 217 281 217 353 217 403 217 290 217 199 2011 221 148 221 904 223 044 224 060 224 869 224 841 2012 227 759 228 285 228 866 229 172 228 785 228 626 2013 231 444 232 803 232 245 231 672 231 990 232 583 2014 235 128 235 356 235 790 236 240 236 950 237 348 Year Jul Aug Sep Oct Nov Dec 2009 214 726 215 445 215 861 216 509 217 234 217 347 2010 217 605 217 923 218 275 219 035 219 590 220 472 2011 225 419 226 082 226 676 226 811 227 157 227 145 2012 228 584 229 911 231 104 231 741 231 202 231 165 2013 232 980 233 413 233 773 233 903 234 038 234 697 2014 Questions 1 By what percent did the cost of goods and services change between December 2013 and June 2014 2 (A) By what percent might you expect the average cost of the goods and services to change over the second 6 month period of 2014 Hint First, calculate the percentage cost change for the period July through December for each of the previous years 2009 through 2013 Second, take the average of these 5 figures Theis calculation gives us the average percent cost change We often rely on multiple years for estimations to give us a more stable picture of percent cost changes (B) What is the estimated average salary for December 31, 2014 Hint (initial average salary X average percent cost change) initial average salary X 100 3 (A) By what percent might you expect the average cost of goods and services to change between January 1, 2015 and December 31, 2015 Hint First, calculate the percent cost change for the period January through December for each of the previous years 2009 through 2013 Second, take the average of these five figures to calculate the average percent cost change (B) what is the estimated average salary for December 31,2015 Hint (December 2014 average salary X average percentage cost change) December 2014 average salary X 100

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As a newly hired compensation analyst, youve been asked by the Director of Compensation to assist with the preparation of next years compensation plan. The

As a newly hired compensation analyst, you’ve been asked by the Director of Compensation to assist with the preparation of next year’s compensation plan. The period for the compensation plan is January 1 - December 31, 2015. Your assignment is to update salary survey data using the CPI-U to estimate new salary information. Also, assume that it is July 1, 2014, and you have been asked to submit your analysis within the next two days. The salary survey data were current through the end of 2013, and the initial average salary reported for accountant jobs in the survey was $50,000. The salary data will be 12 and 24 months old at the pay plan’s implementation (on January 1, 2015) and end (December 31, 2015), respectively. You have been provided the national CPI-U data, which were obtained from the BLS website.

Year	Jan	Feb	Mar	Apr	May	Jun
2009	211.933	212.705	212.495	212.709	213.022	214.726
2010	217.488	217.281	217.353	217.403	217.290	217.199
2011	221.148	221.904	223.044	224.060	224.869	224.841
2012	227.759	228.285	228.866	229.172	228.785	228.626
2013	231.444	232.803	232.245	231.672	231.990	232.583
2014	235.128	235.356	235.790	236.240	236.950	237.348

Year	Jul	Aug	Sep	Oct	Nov	Dec
2009	214.726	215.445	215.861	216.509	217.234	217.347
2010	217.605	217.923	218.275	219.035	219.590	220.472
2011	225.419	226.082	226.676	226.811	227.157	227.145
2012	228.584	229.911	231.104	231.741	231.202	231.165
2013	232.980	233.413	233.773	233.903	234.038	234.697
2014

Questions:

1. By what percent did the cost of goods and services change between December 2013 and June 2014?

2. (A) By what percent might you expect the average cost of the goods and services to change over the second 6-month period of 2014? Hint: First, calculate the percentage cost change for the period July through December for each of the previous years: 2009 through 2013. Second, take the average of these 5 figures. Theis calculation gives us the average percent cost change. We often rely on multiple years for estimations to give us a more stable picture of percent cost changes.

(B) What is the estimated average salary for December 31, 2014? Hint: [(initial average salary X average percent cost change) + initial average salary] X 100%.

3 (A) By what percent might you expect the average cost of goods and services to change between January 1, 2015 and December 31, 2015? Hint: First, calculate the percent cost change for the period January through December for each of the previous years: 2009 through 2013. Second, take the average of these five figures to calculate the average percent cost change.

(B) what is the estimated average salary for December 31,2015? Hint: [(December 2014 average salary X average percentage cost change) + December 2014 average salary] X 100%.