A Fast Food Restaurant Just Leased a New Freezer and Food

question 27

Multiple Choice

A fast food restaurant just leased a new freezer and food fryer for three years. The service contract for the freezer offers unlimited repairs for a fee of $125 a year plus a $35
Service charge for each repair needed. The restaurant's research indicates that during a
Given year 80% of these freezers need no repairs, 11% needed to be serviced once, 5%
Twice, 4% three times, and none required more than three repairs. The standard deviation
Of the number of repairs for this freezer per year is

• A) 0.72 repairs.
• B) 0.512 repairs2.
• C) 1.25 repairs.
• D) 2.5 repairs2.
• E) 0.33 repairs.

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Definitions:

Estimated Data

Data that has been predicted or approximated based on available information, often used for planning and forecasting purposes.

Generally Accepted Accounting Principles

A set of accounting standards and procedures that are used in the United States to govern financial reporting and accounting.

Managerial Accounting Reports

Financial reports that provide detailed and specific information to a company's management to aid in decision making, planning, and controlling activities.

Organization Chart

A diagram that shows the structure of an organization and the relationships and relative ranks of its parts and positions/jobs.