High School Statistics

Question

A bakery sells two types of muffins: blueberry and chocolate chip. Based on sales data, 60% of customers buy blueberry muffins, and 40% buy chocolate chip muffins. The bakery wants to estimate the expected revenue from muffins sold on a given day.

Each muffin costs $3.50, and they sell an average of 100 muffins daily.

1.       What is the expected revenue for blueberry muffin sales each day?

2.       What is the expected revenue for chocolate chip muffin sales each day?

3.       What is the total expected revenue from muffins per day?

Answer 1

Let’s first figure out the probability of each type of muffin sold per day:

Blueberry muffins (BB): If 60% of customers buy BB, then the probability of a customer purchasing a BB is 0.6

Chocolate Chip muffins (CC): If 40% of customers buy CC, then the probability of a customer purchasing a CC is 0.4

1. Expected revenue for blueberry muffins. To calculate the expected revenue, we use the following formula:

EV = (probability x total sales) x (value of item)

EV = (0.6 x 100) X 3.50

EV = 60 x 3.50

EV= $210

2. Expected revenue for chocolate chip muffins. Calculate the expected revenue as above, but use the probability for chocolate chip muffins:

EV = (probability x total sales) x (value of item)

EV = (0.4 x 100) x 3.50

EV = 40 x 3.50

EV = $140

3.Total expected revenue from muffins for the day.

EV = (probability x total sales) x (value of item)

EV = (1 x 100) X 3.50

EV = 100 x 3.50

EV = $350