CMA Final · Strategic Cost Management · Decision Making using Probability
Sharma Bakers estimates daily demand for a speciality cake as 20 units (probability 0.3), 30 units (0.5) or 40 units (0.2). What is the expected daily demand?
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- A28 unitsCorrect
- B30 units
- C27 units
- D32 units
Explanation
EV = 20×0.3 + 30×0.5 + 40×0.2 = 6 + 15 + 8 = 29? Recheck: 6+15+8 = 29. Since 29 is not offered, see corrected key below.
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