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provision

RRoy12y ago
hello Mike 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?
MMikeLittleTutor12y ago#1
That's what I get it to! Let's both hope that it's correct!
RRoy12y ago#2
thanks mike.
MMikeLittleTutor12y ago#3
You're welcome
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