8) Retson Inc. produces two product lines: T-shirts and Sweatshirts. Product profitability is analyzed as follows:

T-SHIRTS SWEATSHIRTS

Production and sales volume 67,000 units 20,000 units

Selling price $16.00 $29.00

Direct material $2.00 $ 5.00

Direct labor $ 4.50 $8.20

Manufacturing overhead $ 2.00 $ 3.00

Gross profit $7.50 $12.80

Selling and administrative $ 4.00 $ 7.00

Operating profit $3.50 $5.80

What is the projected decline in operating income if the direct materials costs of T-Shirts increase to $3.50 per unit and direct labor costs of Sweatshirts increase to $14.00 per unit?

A) $216,500

B) $100,500

C) $116,000

D) $514,500