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Shady Inc. manufactures outdoor umbrellas. The company has the capacity to produce100,000 units per year,...

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Accounting

Shady Inc. manufactures outdoor umbrellas. The company has the capacity to produce100,000 units per year, but it currently produces and sells 75,000 units per year. The following information relates to current production:

Sale price per unit

$44

Variable costs per unit:

Manufacturing

$26

Marketing and administrative

$6

Total fixed costs:

Manufacturing

$76,000

Marketing and administrative

$22,000

If a special sales order is accepted for 2,800 umbrellas at a price of $34 per unit, fixed costs increase by $8,000, and variable marketing and administrative costs for that order are $1 per unit, how would operating income be affected? (NOTE: Assume regular sales are not affected by the special order.)

A. Increase by $14,400

B. Decrease by $11,600

C. Increase by $19,600

D. Increase by

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