Show your workings:

A firm makes dresses. The material and labour cost of producing each dress is 4. The fixed

cost apportioned toeach dress is 5. The current price each dress is sold for is 12. A special

order comes in and the buyer wants to pay 7. One of the following statements is true.

A

The order should be rejected, as the price is less than the normal price

B

The order should be rejected, as the price is less than the absorption cost

C

The order should be accepted as we would be making a gain of 3 per dress

D

The order should be accepted as we would be making a gain of 8 per dress