(Appendix 12A)The DVD Division of Sound Company Makes and Sells

question 22

Multiple Choice

(Appendix 12A) The DVD Division of Sound Company makes and sells compact DVD players (DVDP) that it presently sells to outside customers.Budgeted costs next month for the DVD Division are as follows: MaxiSound, another division of Sound Company, would like to buy 1, 000 of the DVDPs from the DVD Division.An outside supplier has offered to sell similar DVDPs to MaxiSound for $170 each. Assume the DVD Division's monthly production capacity is 4, 000 units.If the DVD Division sells 1, 000 DVDPs to MaxiSound for $170 each, the monthly effect on the profits of DVD Division will be a:

• A)$65, 000 increase
• B)$50, 000 increase
• C)$185, 000 increase
• D)$170, 000 increase

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Definitions:

Normal Distribution

In this type of distribution, occurrences of data are more frequent near the mean and decrease in frequency as they move away from the mean, with the distribution being symmetric.

Sampling Distribution

The probability distribution of a statistic based on random samples from a population, used to estimate population parameters.

Standard Deviation

An indicator of the degree to which a dataset's values vary or are dispersed, showing the extent of deviation from the average.

Normal Distribution

A distribution of probabilities that is even on both sides of the mean, illustrating that values near the mean happen more often than values at a greater distance from the mean.