Given the Following Data, Find the Expected Breakdown Cost

question 85

Essay

Given the following data, find the expected breakdown cost. The cost per breakdown is $100.
$$\begin{array} { | l | c | c | c | c | } \hline \text { Number of breakdowns } & 0 & 1 & 2 & 3 \\\hline \text { Monthly frequency } & 5 & 20 & 23 & 2 \\\hline\end{array}$$

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Definitions:

Expense Account

An account used in accounting to track expenditures related to the operation of a business, including costs for goods, services, and operational activities.

Adjusting Journal Entries

Entries in accounting made during the close of a financial period, aiming to accurately allocate profits and expenditures to their respective periods of occurrence.

Net Income

A company's overall earnings following the deduction of all expenses and taxes from its total revenue.

Adjusting Entry

An adjusting entry is a journal entry made in the accounting records at the end of an accounting period to allocate income and expenditure to the period in which they actually occurred.