Mary Orders a Dress for $1,000

Mary orders a dress for $1,000.Mary doesn't inspect the dress on arrival and therefore doesn't discover a flaw in the fabric until the day before she is to wear it to her first board meeting as president of Tri-State Engineering.This is a month after the dress arrived.She calls the designer and sends the dress back, but it is lost in the mail.Mary's insurance would cover $400 of the loss.The designer's insurance would cover $900.Who is liable?

A) Mary will bear the whole loss because she accepted the goods.
B) The designer will bear the whole loss because Mary returned the nonconforming goods.
C) Mary will owe $100; the designer, $900.
D) The risk is Mary's to the extent of $400.