Mamma Temte bakes six pies a day that cost $2 each to produce. On 15% of the days she sells only two pies. On 30% of the days, she sells 4 pies, and on the remaining 55% of the days, she sells all six pies. If Mama Temte sells her pies for $6 each, what is her expected profit for a day's worth of pies

Her expected profit for a day's worth of pies is $24

Step-by-step explanation:

Number of pies she bakes a day = 6

Cost to produce each pie = $2

Total cost to produce 6 pies = 6 * $2 = $12

Sales price for each pie = $6

On 55% of the days, she sells all 6 pies. Total sales = 6 * $6 = $36

Profit = total sales - total cost = $36 - $12 = $24

Given Information:

Baking cost of each pie = $2

No. of pies baked a day = 6

Selling cost of each pie = $6

No. of pies sold a day = 15% 2 pies, 30% 4 pies, 55% 6 pies

Required Information:

Expected profit = ?

Answer:

Expected profit = $16.8

Step-by-step explanation:

We know that expected profit is found by

Expected profit = cost of pies sold - cost of pies produced

So first we need to find the cost related to baking the pies

cost of pies produced = cost of each each pie * no. of pies

cost of pies produced = $2*6

cost of pies produced = $12

Now we need to find out how many pies she sold a day on average

pies sold = 15% of 2 + 30% of 4 + 55% of 6

pies sold = 0.15*2 + 0.30*4 + 0.55*6

pies sold = 0.3 + 1.2 + 3.33

pies sold = 4.8

cost of pies sold = $6*4.8

cost of pies sold = $28.8

So the expected profit is

Expected profit = cost of pies sold - cost of pies produced

Expected profit = $28.8 - 12

Expected profit = $16.8