In 1987 Fabrico, a clothing manufacturer, sold to its customers a total of 2. 3 million dollars worth of clothing, a 17 percent increase over 1986 sales. In January 1988, however, Fabrico closed one of its clothing factories, citing reduced demand for its products as the major reason. Which one of the following, if true about 1987, contributes most to a resolution of the apparent discrepancy noted between the sales figures and the reason offered for closing a factory?
A: Fabrico spent less on capital improvements than it did in 1986, when it added new plant capacity and new equipment.
B: Because of escalating costs for raw materials, prices charged by Fabrico for its products were on average 42 percent higher than they were in 1986.
C: The total worldwide dollar value of clothing sales by manufacturers to customers increased by 5 percent over sales in 1986.
D: Fabrico's employees dropped earlier demands for a 25 percent increase in company-paid benefits and a 15 percent increase in hourly wages.
Choose A, B, C or D as your solution.
B