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Pamela in Bamplona makes bull-repellent scent according to a traditional Spanish recipe, which normally sells at $9 per unit. Normal production volume is 10,000 ounces

Pamela in Bamplona makes bull-repellent scent according to a traditional Spanish recipe, which normally sells at $9 per unit. Normal production volume is 10,000 ounces per month. Average cost is $5 per ounce, of which $2 is direct material and $1 is variable conversion cost. This product is seasonal. After July, demand for this product drops to 6,000 ounces monthly. In November, Umberto offers to buy 1,500 ounces for $6,000. If Pamela accepts the order, she must design a special label for Umberto at a cost of $500. Each label will cost 25 cents to make and apply. Pamela should:

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accept the order, at a gain of $ 625

reject the order, at a loss of $ 1,875

reject the order, at a loss of $ 2,375

accept the order, at a gain of $ 1,125

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