1. Chicharito Corporation, a manufacturer of Mexican foods, contracted in 2010 to purchase 1,000 pounds of a spice mixture at $5.00 per pound, delivery and payment to be made in Spring of 2012. By 12/31/10, the price per pound of the spice mixture had dropped to $4.60 per pound. By 12/31/11, the price per pound of the spice mixture was $4.75 per pound. In 2011, Chicharito should recognize:

a.a loss of $250

b. a gain of $250

c.a loss of $150

d. a gain of $150