A company contemplating the acceptance of a special order has the following unit cost behavior, based on 10,000 units:
Direct materials $ 4
Direct labor 10
Variable overhead 8
Fixed overhead 6
A foreign company wants to purchase 1,000 units at a special unit price of $25. The normal price per unit is $40.
In addition, a special stamping machine will have to be purchased for $2,000 in order to stamp the foreign company's name on the product. The incremental income (loss) from accepting the order is:
a. $3,000.
b. $1,000.
c. $(3,000).
d. $(1,000).