A business received an offer from an exporter for 5,000 units of product at $10 per unit.
The acceptance of the offer will not affect normal production or domestic sales prices.
The following data are available:

-What is the amount of gain or loss from acceptance of the offer?
A)$5,000 gain
B)$10,000 loss
C)$5,000 loss
D)$10,000 gain

Question

A business received an offer from an exporter for 5,000 units of product at $10 per unit.
The acceptance of the offer will not affect normal production or domestic sales prices.
The following data are available:
 
-What is the amount of gain or loss from acceptance of the offer?
A)$5,000 gain 
B)$10,000 loss 
C)$5,000 loss 
D)$10,000 gain

Quizplus · Accepted Answer

The company will receive $15,000 from the sale of the equipment and will pay $10,000 to the customer for the cancellation of the contract. Therefore, the company will have a gain of $5,000 from the acceptance of the offer.

A Business Received an Offer from an Exporter for 5,000