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An order for 10 custom-designed castings has been received. The casting process costs $1100 per unit scheduled. If a casting is not sold it has a recycle value of $300. The customer has indicated a willingness of to pay $2700 per casting for acceptable casting no more no less! • If number of good casts is less than 10 then the customer does not accept • For only one casting if we have the 5% chance probability of having defective • How many casting should be scheduled for production in order to maximize profit

An order for 10 custom-designed castings has been received. The casting process costs $1100 per unit scheduled. If a casting is not sold it has a recycle value of $300. The customer has indicated a willingness of to pay $2700 per casting for acceptable casting no more no less! • If number of good casts is less than 10 then the customer does not accept • For only one casting if we have the 5% chance probability of having defective • How many casting should be scheduled for production in order to maximize profit

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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An order for 10 custom-designed castings has been received. The casting process costs $1100 per unit scheduled. If a casting is not sold it has a recycle value of $300. The customer has indicated a willingness of to pay $2700 per casting for acceptable casting no more no less! • If number of good casts is less than 10 then the customer does not accept • For only one casting if we have the 5% chance probability of having defective • How many casting should be scheduled for production in order to maximize profit?

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