The Microprocessors, Which Are Used in Automobiles to Regulate Fuel

question 249

Short Answer

The microprocessors, which are used in automobiles to regulate fuel consumption, are guaranteed against defects for 15,000 miles of use. Tests conducted in the laboratory under simulated driving conditions reveal that the distances driven before the microprocessors break down are exponentially distributed and that the average distance driven before the microprocessors fail is 80,000 miles. What is the probability that a microprocessor selected at random will fail during the warranty period? Please round the answer to the nearest hundredth.

---

Definitions:

Net Operating Income

The profit realized from a business's operations after subtracting operating expenses but before taxes and interest.

Variable Selling

Refers to the costs associated with selling a product or service that fluctuate with the level of sales activity, such as commissions and shipping charges.

Absorption Costing

A cost accounting methodology that absorbs all production costs, like direct materials, direct labor, and overhead expenses whether variable or fixed, into the final cost of a product.

Variable Costing

A costing method that includes only the variable manufacturing costs (direct materials, direct labor, and variable manufacturing overhead) in product costs.