Tray Has a T-Shirt Business That Buys Shirts from a Wholesaler

question 39

Multiple Choice

Tray has a T-shirt business that buys shirts from a wholesaler for four dollars each and sells them to retailers for eight dollars each. He imprints each shirt with a picture of a musical artist that costs him two dollars. He also pays his cousin to do the printing at five dollars an hour. LaShawn prints five shirts per hour. A retailer offers to buy 1000 shirts at seven dollars each. Should Tray agree to the deal?

• A) Yes, Tray will make a profit of one dollar per shirt.
• B) No, Tray will not make a profit at this price.
• C) Yes, Tray will make a marginal profit at this rate.
• D) Yes, even though he may lose money he can make up for it in volume.

Grasp the idea of foreign direct investment and how corporations establish or acquire business interests in foreign countries.

Comprehend the effects of globalization on national labor unions, government regulations, and economic integration.

Recognize the impact of increased globalization and financialization on world markets, unique cultural and social systems.

Learn about the role of capital mobility in job relocation and the international movement of labor.

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Definitions:

Asset Account

An account that represents a resource owned by a business from which future economic benefits are expected.

Expense Account

An account used to record expenses incurred by a business, which are then used to reduce income on the profit and loss statement.

Understated

Understated means that a financial amount has been reported or recorded as less than its actual or true value.

Posting

The process of recording financial transactions in the accounting ledger from the journal.