Question

A school sells pizza slices at the concession stand during each sporting event. The school sells a mean of

200 slices per event with a standard deviation of 25 slices.
The school spends $160 of fixed costs to buy the pizza before the event and earns a revenue of $2 per
slice. They calculate their profit per event according to this formula:
profit
(total revenue) – (total costs]
What will be the mean and standard deviation of the distribution of profit per event?

Answer 1

μ = $240

σ = $50

Explanation:

Profit is revenue minus cost:

P = R – C

The revenue is $2 times the number of slices sold, and the cost is $160.

P = 2x – 160

The average profit is:

μ = 2(200) – 160

μ = 240

The standard deviation is:

σ = 2(25)

σ = 50