AJ Corporation, a Manufacturer of Ethnic Foods, Contracted in 2007

AJ Corporation, a manufacturer of ethnic foods, contracted in 2007 to purchase 500 pounds of a spice mixture at $5.00 per pound, delivery to be made in spring of 2008.By 12/31/07, the price per pound of the spice mixture had risen to $5.60 per pound.In 2007, AJ should recognize

A) a loss of $2,500.
B) a loss of $300.
C) no gain or loss.
D) a gain of $300.