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 3675

decease by 4200

increase by 4200

increase by 24325

increase by 2875