Nitz' Company is planning to produce a new product, Duhat Soap. A marketing consultant prepared the following payoff probability distribution describing the relative likelihood of monthly sales volume levels and related contribution margin for Duhat Soap: Monthly Sales Volume 15,000 units 18,000 27,000 36,000 45,000 Probability 40% 30% 15% 10% 5% Contribution Margin P 75,000 90,000 135,000 180,000 225,000 If Nitz' Company decides to market Duhat Soap, the expected value of the monthly contribution margin is a. P141,000. c. P106,500. b. P705,000. d. P 21.300.
Nitz' Company is planning to produce a new product, Duhat Soap. A marketing consultant prepared the following payoff probability distribution describing the relative likelihood of monthly sales volume levels and related contribution margin for Duhat Soap: Monthly Sales Volume 15,000 units 18,000 27,000 36,000 45,000 Probability 40% 30% 15% 10% 5% Contribution Margin P 75,000 90,000 135,000 180,000 225,000 If Nitz' Company decides to market Duhat Soap, the expected value of the monthly contribution margin is a. P141,000. c. P106,500. b. P705,000. d. P 21.300.
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter16: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 10E: Schylar Pharmaceuticals, Inc., plans to sell 130,000 units of antibiotic at an average price of 22...
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Question
![Nitz' Company is planning to produce a new product, Duhat Soap. A marketing consultant prepared the following
payoff probability distribution describing the relative likelihood of monthly sales volume levels and related
contribution margin for Duhat Soap:
Monthly Sales Volume
15,000 units
18,000
27,000
36,000
45,000
Probability
40%
30%
15%
10%
5%
Contribution Margin
P 75,000
90,000
135,000
180,000
225,000
If Nitz' Company decides to market Duhat Soap, the expected value of the monthly contribution margin is
a. P141,000.
C.
P106,500.
d. P 21,300.
b. P705,000.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8d377841-5d4e-4025-8342-0f874de2b403%2Feeb60308-ed7e-4eea-ae65-7383d578b69c%2Fgnkr0h_processed.png&w=3840&q=75)
Transcribed Image Text:Nitz' Company is planning to produce a new product, Duhat Soap. A marketing consultant prepared the following
payoff probability distribution describing the relative likelihood of monthly sales volume levels and related
contribution margin for Duhat Soap:
Monthly Sales Volume
15,000 units
18,000
27,000
36,000
45,000
Probability
40%
30%
15%
10%
5%
Contribution Margin
P 75,000
90,000
135,000
180,000
225,000
If Nitz' Company decides to market Duhat Soap, the expected value of the monthly contribution margin is
a. P141,000.
C.
P106,500.
d. P 21,300.
b. P705,000.
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