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Markson Company had the following results of operations for the past year:

Sales (8,000 units at $19.40)				$	155,200
Variable manufacturing costs	$	83,600
Fixed manufacturing costs		14,400
Variable administrative expenses		9,600
Fixed selling and administrative expenses		19,400			(127,000	)
Operating income				$	28,200

A foreign company offers to buy 2,000 units at $13.10 per unit. In addition to variable manufacturing and administrative costs, selling these units would increase fixed overhead by $1,540 for the purchase of special tools. Marksons annual productive capacity is 12,000 units. If Markson accepts this additional business, its profits will:

Multiple Choice

• Decrease by $5,550.

• Increase by $1,360.

• Decrease by $1,540.

• Decrease by $4,440.

• Increase by $2,900.