You have been asked to determine the probability that the contribution margin for a particular product line exceeds the fixed cost of $2,000. The total number of units sold is a normally distributed random variable with a mean of 400 and a variance of 900, X ~ N(400, 900). The selling price per unit is $10.
The total number of units produced is a normally distributed random variable with a mean of 400 and a variance of 1,600, Y ~ N(400, 1,600). The variable production cost is $4 per unit. Production and sales have a positive correlation of 0.50.