Videx is the premier firm in the security systems industry. Martha Rameriz is an account manager at Videx responsible for selling residential systems. She is compensated based on beating a predetermined sales budget. The last seven years’ sales budgets and actual sales data follow. Videx sets its sales budgets centrally in a top-down fashion.
| Year | Budget | Actual | Difference |
| 1 | $850,000 | $865,000 | $15,000 |
| 2 | 862,000 | 888,800 | 26,800 |
| 3 | 884,000 | 852,000 | -32,000 |
| 4 | 884,000 | 895,000 | 11,000 |
| 5 | 893,000 | 878,000 | -15,000 |
| 6 | 893,000 | 902,000 | 9,000 |
| 7 | 901,000 | ||
| Average | 881,000 | 880,133 | 2,467 |
| Standard deviation | 18,385 | 18,970 | 21,715 |
| Median | 884,000 | 883,400 | 10,000 |
Required:
a. Martha Rameriz sells $908,000 in year 7. What budget will she be assigned for year 8?
b. Suppose Rameriz sells $900,000 of systems in year 7. What budget will she be assigned in year 8?
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