Both I/O bound and CPU bound processes execute for 1 ms before incurring a context swith overhead of 0.1 ms. Total time spent by a process (irrespective of I/O bound or CPU bound) is 1+0.1=1.1 ms. Therefore, on an average, the CPU utilization is (1/1.1) *100=91%
Now, if time quantum is 10 ms, situation is different. The I/O bound processes takes a context switch in every 1 ms (a total of 1.1 ms for each I/O bound process) whereas a CPU bound process executes for 10 ms and then only take the context switch (a total of 10 +0.1 ms). So total time is (10 * 1.1) + (10.1) = 21.1 ms. Out of this, the CPU is utilized only 20 ms (10*1 by I/O bound and 10 ms by the CPU bound process). Hence, CPU utilization is (20/21.1)*100 = 94.7% $\approx$ 94%
