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 with national CPI-U data, which were obtained from the BLS website. year Jan Feb Mar Apr May Jun Jul Aug sep oct nov dec 2009 211.933 212.705 212.495 212.709 213.022 214.790 214.726 215.445 215.861 216.509 217.234 217.347 2010 217.488 217.281 217.353 217.403 217.290 217.199 217.605 217.923 218.275 219.035 219.590 220.472 2011 221.148 221.904 223.044 224.060 224.869 224.841 225.419 226.082 226.676 226.811 227.157 227.145 2012 227.759 228.285 228.866 229.172 228.785 228.626 228.584 229.911 231.104 231.741 231.202 231.165 2013 231.444 232.803 232.245 231.672 231.990 232.583 232.980 233.413 233.773 233.903 234.038 234.697 2014 235.128 235.356 235.790 236.240 236.950 237.348 Questions: 7-8. By what percent did the cost of goods and services change between December 2013 and June 2014? 7-9. (A) By what percent might you expect the average cost of 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 five figures. This 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 average percent cost change) + initial average salary] 100%. 7-10. (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 average percentage cost change) + December 2014 average salary] 100%.