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The expected cost of producing 500 products is $14300
<u>Explanation:</u>
Given:
Cost of products = $32
Cost of repair = $15
Probability of no defective pens = 80%
Probability of defective pens = 20%
Cost of 500 products = ?
Number of defective products =
n = 100
Number of good products =
n(good) = 400
Cost of production of good products = 400 X $32
= $12800
Cost of defective pens = 100 X $15
= $1500
Expected cost of producing 500 products = $12800 + $1500
= $14300
Therefore, the expected cost of producing 500 products is $14300