28] Markson Company had the following results of operations for the past year:
|
Sales (8,000 units at $19.50)
|
|
$156,000
|
|
Variable manufacturing costs
|
$84,000
|
|
|
Fixed manufacturing costs
|
14,500
|
|
|
Variable selling and administrative expenses
|
10,000
|
|
|
Fixed selling and administrative expenses
|
19,500
|
(128,000)
|
|
Operating income
|
|
$28,000
|
A foreign company whose sales will not affect Markson's market offers to buy 2,000 units at $13.25 per unit. In addition to variable manufacturing costs, selling these units would increase fixed overhead by $1,550 for the purchase of special tools. If Markson accepts this additional business, its profits will:
Decrease by $1,550.
Increase by $3,000.
Decrease by $5,500.
Decrease by $4,550.
Increase by $1,450.