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

A foreign company (whose sales will not affect Benjamins market) offers to buy 3,000 units at $12.00 per unit. In addition to variable manufacturing costs, selling these units would increase fixed overhead by $950 and selling and administrative costs by $700. Assuming Benjamins productive capacity is 12,000 units per year and accepts the offer, its profits will:

a. Decrease by $10,650.

b. Increase by $ 7,350.

c. Increase by $ 3,700.

d. Decrease by $9,000.

e. Decrease by $ 83,400.

$180,000 Sales (12,000 units at $15) Direct materials and direct labor Overhead (20% variable) Selling and administrative expenses (all fixed) Operating income $60,000 12,000 15,600 (87,600) $ 92,400