Variance of the breakdown cost

Reference no: EM13995715

A company owns two different computers, which are in separate buildings and operated entirely separately. Based on past history, Computer 1 is expected to break down 5 0 times a year, with a variance of 6, and costing $200 per breakdown. Computer 2 is expected to break down 3.6 times per year, with a variance of 7, and costing $165 per breakdown What is the company's expected cost for computer breakdowns and the variance of the breakdown cost? What assumption must you make to find the variance? Is this a reason- able assumption?

Reference no: EM13995715

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