An Economist consultant needs to forecast the unit cost of a product for the next year. He notes
that each unit of the product requires 10 labor hours and 5 kg of raw material. In addition, each
unit of the product is assigned an overhead cost of ETB 200. He estimates that the cost of a labor
hour next year will be normally distributed with an expected value of ETB 45 and a standard
de useviation of ETB 2; the cost of raw material will be normally distributed with an expected value
of ETB 60 and a standard deviation of ETB 3.
A. Find the distribution of the unit cost of the product.
B. Find its expected value and variance.
