Samson Incorporated provided the following information regarding its only product:
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Sale price per unit
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$50.00
|
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Direct materials used
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$160,000
|
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Direct labor incurred
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$185,000
|
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Variable manufacturing overhead
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$120,000
|
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Variable selling and administrative expenses
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$70,000
|
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Fixed manufacturing overhead
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$65,000
|
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Fixed selling and administrative expenses
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$12,000
|
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Units produced and sold
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20,000
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Assume no beginning inventory
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Assuming there is excess capacity, what would be the effect on operating income of accepting a special order for 1,200 units at a sale price of $47 per product? The 1,200 units would not require any variable selling and administrative expenses. (NOTE: Assume regular sales are not affected by the special order.)
A. Increase by $28,500
B. Decrease by $28,500
C. Increase by $24,300
D. Increase by $84,300