1.John owns an electronics store. Based on a number of factors including weather, day of the week and the occurrence of national sporting events, John has constructed the following probability distribution of customers that will come into his store during the weekend:

Number of customers and the probability are as follows:

300 10%

400 20%

500 35%

600 20%

700 10%

800 5%

A higher percentage of customers make a purchase when there are fewer customers in the store. John estimates that 80% of the customers will purchase goods when there are 300 or fewer customers in the store during the weekend. The number of customers that will make a purchase drops by 4% for every 100 customers. The average sale is $90 per customer. Profit margin is 12% on all sales.

How can I calculate the profit John can expect from weekend sales?

Ashford Inc produces a single product. The cost to produce one unit: DM $ 15.00 DL $10.00 Variable overhead 7.50 Variable selling expenses 6.25 Fixed overhead 1.00 Total cost $ 39.75 The fixed overhead cost of $1 per unit is based on the expected production of 25,000 units.

If more than 25,000 units are produced, Ashford will incur an additional $125,000 of fixed overhead costs. Fixed selling and administrative expense is $50,000, regardless of the number of units sold. Ashford expects to sell 18,000 units in the coming year. Ashford has been invited to bid on a contract to supply a special order of 10,000 units. Ashford expects to incur only $1 per unit in variable selling expenses to fill the special order; all other variable costs will remain constant. The 10,000 units will be added to Ashford's usual production schedule.

How can I determine the most acceptable minimum price that Ashford should bid?