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Problem 1: Demand for devil's food whipped-cream layer cake at a local pastry shop can be approximated using a normal distribution with a mean of 24 and a standard deviation of 4. The manager estimates it costs $9 to prepare each cake. Fresh cakes sell for $21. All day-old cakes sell for $6. At this price, there is an ample demand for day-old cakes. Which one of the following Excel formulas determine optimal inventory levels?
Select one:
a. =NORMDIST(0.8,24,4,1)b. =NORMINV(0.2,24,4)c. =NORMINV(0.8,24,4)d. =NORMINV(1,24,4)e. =NORMDIST(1,24,4,1)f. =NORMDIST(0.2,24,4,1)
Conversion cost $6,644. Compute the cost of goods transferred out and the ending inventory using the weighted average method
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