A business received an offer from an exporter for 10,000 units of product at $13.50 per unit.The acceptance of the offer will not affect normal production or domestic sales prices.The following data are available:
A)$75,000 loss
B)$40,000 gain
C)$15,000 gain
D)$85,000 gain

Question

Quizplus · Accepted Answer

To determine the best choice, we need to calculate the total cost and revenue involved in the offer. The cost of the 10,000 units at $13.50 per unit is $135,000. However, since the offer will not affect normal production or domestic sales prices, we can assume that there are no additional costs involved.

Let's look at the revenue side. We don't know the selling price of the product, so let's assume it's $15 per unit, which is a reasonable markup from the cost of $13.50 per unit. The revenue from selling 10,000 units at $15 per unit is $150,000.

Now, we need to compare the revenue and cost to determine the best choice:

Revenue - cost = $150,000 - $135,000 = $15,000

Since the result is a positive number, we have a gain. Therefore, option C ($15,000 gain) is the best choice.

A Business Received an Offer from an Exporter for 10,000