i have a quick question regarding a provision question.
the provision required for product warranty claims against 200,000 units of retail goods supplied with a one-year warranty
70% of sales will have no claim 20% of sales will require a $25 repair 10% of sales will require a $120 repair
i understand that we have to use the concept of expected value when we deal with large population.
am i right is saying that the proviion for the above would be (70%*200,000 x nil) + (20% of 200,000 * 25) + (10% of 200,000 * 120) which is equal to 3400000?