## Questions on Eversoft Manufacturing

Questions on Eversoft Manufacturing in \$9 only

Absorption & Variable Costing

Eversoft Manufacturing produces towels to be sold as souvenirs at sporting events throughout the world. Assume that units produced equalled units sold in 2016. The company’s variable-costing income statement is as follows:

Eversoft Manufacturing

Income Statement

Year Ended December 31, 2016

Variable Costing

Sales (260,700 units) \$521,400

Variable cost of goods sold \$255,486

## RES 341 Week 4 Chapter 5 E Exercises 5.62 and 5.70

Chapter 5 E Exercises 5.62 and 5.70

5.62 A certain airplane has two independent alternators to provide electrical power. The probability that a given alternator will fail on a 1-hour flight is .02. What is the probability that (a) both will fail? (b) Neither will fail? (c) One or the other will fail? Show all steps carefully.

5.70 The probability is 1 in 4,000,000 that a single auto trip in the United States will result in a fatality. Over a lifetime, an average U.S. driver takes 50,000 trips. (a) What is the probability of a fatal accident over a lifetime? Explain your reasoning carefully. Hint: Assume independent events. Why might the assumption of independence be violated? (b) Why might a driver be tempted not to use a seat belt “just on this trip”?