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In preparing for the upcoming holiday season, a local toy company designed a new doll called The Penguin that teaches children how to dance. The
In preparing for the upcoming holiday season, a local toy company designed a new doll called The Penguin that teaches children how to dance. The fixed cost to produce the doll is $ The variable cost, which includes material, labor, and shipping costs, is $ per doll. During the holiday selling season, the company will sell the dolls for $ each. If the company overproduces the dolls, the excess dolls will be sold in January through a distributor who has agreed to pay the company $ per doll. Demand for new toys during the holiday selling season is uncertain. The normal probability distribution with an average of dolls and a standard deviation of is assumed to be a good description of the demand. The company has tentatively decided to produce units the same as average demand but it wants to conduct an analysis regarding this production quantity before finalizing the decision.
A Based on the information below, what is the profit when demand is exactly equal to and units?
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