Use the Following Information to Answer Questions $S M C = 12 - 0.005 Q + 0.0000008 Q ^ { 2 }$

question 20

Multiple Choice

Use the following information to answer Questions.
Sport Tee Corporation manufactures T-shirts bearing the logos of professional baseball and football teams. The wholesale market for sport T-shirts is perfectly competitive.The manager forecasts the wholesale price of T-shirts next year to be $7.00. The firm's estimated marginal cost is $S M C = 12 - 0.005 Q + 0.0000008 Q ^ { 2 }$ where Q is the number of T-shirts produced and sold each month. Sport Tee Corporation will have a fixed cost of $2,000 per month.
-To maximize profit how many T-shirts should be produced and sold each month?

• A) 1,000
• B) 2,000
• C) 3,000
• D) 4,000
• E) 5,000

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Definitions:

Adjusted Trial Balance

A list of all accounts and their balances after adjusting entries have been made, used to check the equality of debits and credits and prepare financial statements.

Revenue Accounts

Accounts in financial accounting that represent the income generated by a company from its operational activities.

Expense Accounts

These are ledger accounts that track the costs incurred by a company in the course of doing business, excluding capital expenditures.

Adjusting Entries

Journal entries made at the end of an accounting period to update income and expense accounts and ensure compliance with the accrual method of accounting.