The Profit Realized by the Sales of a Particular Item

question 11

Multiple Choice

The profit realized by the sales of a particular item follows a normal distribution with a mean of $0.5 million per quarter and a standard deviation of $0.1 million per quarter. What percent of the quarters can be expected to see a profit of at least $0.5 million?

• A)50%
• B)40%
• C)60%
• D)10%

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Definitions:

Sales Budget

A financial plan that estimates future sales in terms of units and revenue.

Finished Goods Inventory

Items that have completed the manufacturing process and are ready to be sold to customers.

Specialized Electrical Switches

Electrical switches designed for specific functions or applications, often requiring custom designs or specifications to meet unique operational or safety standards.

Variable Costing

A pricing approach that incorporates solely the variable costs of production—such as direct materials, direct labor, and variable manufacturing overhead—into the cost per unit of products.