Bouncy Bungee Rubber Band Company Has Fixed Costs of $2,760,000

Multiple Choice

Bouncy Bungee Rubber Band Company has fixed costs of $2,760,000 per year, it sells its rubber bands for $3.75 per pack, and the variable cost of these packs is $0.75. They estimate they will sell 1,000,000 packs this year, with a standard deviation of 40,000 units. Find the probability of the company incurring a loss. (A normal distribution table, for example, Table V from the text, must accompany this problem.)

A) 3.22%
B) 6.71%
C) 5.48%
D) 2.87%