Rosie's has 1,300 shares outstanding at a market price per share of $10. Sandy's has 2,000 shares outstanding at a market price
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Answer:
"2000 units" is the right solution.
Explanation:
The given values are:
Transferred from WIP,
= 53,000 units
Units sold,
= 61,000 units
Beginning inventory,
= 10000 units
Now,
The total number of finished goods will be:
=
On substituting the values, we get
=
=
The cost of underestimating the demand is considered a revenue loss that arises due to cancellation of flight costing $134. Hence, cost of underetimating the demand is 
.
The cost of overestimating the demand is known as rewards. For example, free round trip ticket worth $263. Hence, the cost of overestimating the demand is
.
The z-score that yields a p-value of 0.3375 is -0.4193.
Thus, super discount airlines should overbook the flight by 35 + (-0.4193 x 24) = 35 - 10.0632 = 24.9368 = 25 seats.
Therefore, super discount airlines should overbook the flight by 25 seats.
The cost of overestimating the demand is known as rewards. For example, free round trip ticket worth $263. Hence, the cost of overestimating the demand is
The z-score that yields a p-value of 0.3375 is -0.4193.
Thus, super discount airlines should overbook the flight by 35 + (-0.4193 x 24) = 35 - 10.0632 = 24.9368 = 25 seats.
Therefore, super discount airlines should overbook the flight by 25 seats.