Chapter 3, Problem 3.48CE

The first seven ustomers of the day at a small donut shop have checks of $1.25, $2.36, $2.50, $2.I5, $4.55, $1.10, and $0.95, respetivcly. Based on thenumber of customers served each day, the manager of the shop claims that the shop needs an average check of $1.75 per pern to stay profItable. Given her contention, has the shop made a profit in serving the first seven customers?

To determine

To explain whether the shop made profit or not in serving their first seven customers based on the given details.

Answer to Problem 3.48CE

Yes, shop made profit in serving first seven customers.

Explanation of Solution

Given:

The checks of first seven customers:

1.25

2.36

2.5

2.15

4.55

1.1

0.95

As per manager, shop stay in profit only when the average check per person is $1.75.

Calculation:

To know whether the shop is in profit or not, it needs to calculate the average checks per person,

  $\begin{array}{c}\text{Mean = }\frac{\sum x_i}{n}\\ =\frac{1.25+2.36+2.5+2.15+4.55+1.1+0.95}{7}\\ =2.12286\end{array}$

Since the average checks amount is $2.12286 and that is greater than $1.75. Therefore, shops made profit in serving first seven customers.