Damon,IncCurrently Produces 30,000 Sweatshirts Each Year for Its Regular Customers

Multiple Choice

Damon,Inc.currently produces 30,000 sweatshirts each year for its regular customers and charges $30 per sweatshirt.Damon has capacity to produce an additional 5,000 sweatshirts if sales grow in the future.Variable costs total $16 per sweatshirt and annual fixed costs total $60,000.The city of Loveland recently approached the company and proposed a one-time purchase of 1,000 sweatshirts for $24 each.Should Damon accept the special order proposal?

A) No,because total fixed costs will increase by $2,000 and total sales will decline by $6,000 from this special order.
B) Yes,because they will make $6 per shirt from this special order.
C) Yes,because they will make $8 per shirt from this special order.
D) No,because they will lose $6 per shirt from this special order.
E) None of the answer choices is correct.