Company a Prints and Distributes Licensed T-Shirts, Which Wholesale at $16

question 43

Multiple Choice

Company A prints and distributes licensed T-shirts, which wholesale at $16 each. A major retail chain store has asked to be supplied with 3000 T-shirts at $14 each; these shirts would carry the store's brand name. To process the order, Company A would need to reconfigure the printing program to print the brand name. This would cost $4000 and would not be reusable. There would be no other additional costs. The current cost structure is: Should the special order be accepted, and why?

• A) Yes, additional profit of $3 per shirt is made.
• B) Yes, new equipment is purchased.
• C) Yes, additional profit of $1.67 per shirt is made.
• D) No, a loss of $4000 is incurred.

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Definitions:

Electrons

Electrons are subatomic particles with a negative electric charge, found in all atoms and acting as the primary carrier of electricity in solids.

Positive Ions

Atoms or molecules that have lost one or more electrons, resulting in a net positive charge.

Gain Electrons

The process by which an atom or a molecule acquires one or more electrons, often leading to a reduction in oxidation state.

Lose Electrons

Refers to the process in which an atom or molecule undergoes oxidation, resulting in the release of electrons.