Benjamin Company had the following results of operations for the past year: Sales (16,000 units at $9.75) $ 156,000 Direct materials and direct labor $ 92,000 Overhead (20% variable) 12,000 Selling and administrative expenses (all fixed) 31,500 (135,500 ) Operating income $ 20,500 A foreign company (whose sales will not affect Benjamin's market) offers to buy 3,500 units at $6.95 per unit. In addition to variable manufacturing costs, selling these units would increase fixed overhead by $550 and selling and administrative costs by $250. Assuming Benjamin has excess capacity and accepts the offer, its profits will:

• Increase by $3,675.

• Decease by $4,200.

• Increase by $4,200.

• Increase by $24,325.

• Increase by $2,875.