A Small Manufacturer That Makes Clothespins and Other Household Products

question 66

Multiple Choice

A small manufacturer that makes clothespins and other household products buys new injection molding equipment for a cost of $500,000. This will allow the manufacturer to make more clothespins in the same amount of time with an estimated increase in sales of 25%. If the manufacturer currently makes 75 tons of clothespins per year, which sell at $18,000 per ton, what will be the increase in revenue next year from the new equipment?

• A) $125,000
• B) $303,750
• C) $337,500
• D) $837,500