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: What is the amount of the gain or loss from acceptance of the offer?
A) $75,000 loss
B) $40,000 gain
C) $15,000 gain
D) $85,000 gain

Question

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:  What is the amount of the gain or loss from acceptance of the offer?
A) $75,000 loss 
B) $40,000 gain 
C) $15,000 gain 
D) $85,000 gain

Quizplus · Accepted Answer

The cost per unit is not given, so we cannot determine the exact profit. However, we know that accepting the offer will not affect normal production or domestic sales prices, so we can assume that the business will still make a profit on each unit sold. Therefore, accepting the offer at $13.50 per unit will result in a gain compared to the cost of the product. The gain will be the difference between the selling price and the cost per unit, multiplied by the number of units sold. Without knowing the cost per unit, we cannot determine the exact amount of the gain, but by accepting the offer, the business will make a profit. Option C is the only answer choice that reflects a gain.

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