A company has the choice of either selling 1,000 unfinished units as is or completing them. The company could sell the unfinished units as is for $4.00 per unit. Alternatively, it could complete the units with incremental costs of $1.00 per unit for direct materials, $2.00 per unit for direct labor, and $1.50 per unit for overhead, and then sell the completed units for $8.00 each. If the company completes the units, what is the impact on income?

Multiple Choice

Income will increase by $4,000.

Income will increase by $500.

Income will decrease by $4,500.

Income will decrease by $500.

Income will increase by $8,000.