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

Sales (16,000 units at $10.30)		$164,800
Direct materials and direct labor	$100,800
Overhead (20% variable)	20,800
Selling and administrative expenses (all fixed)	32,600	(154,200)
Operating income		$10,600

A foreign company (whose sales will not affect Benjamin's market) offers to buy 4,600 units at $8.16 per unit. In addition to variable manufacturing costs, selling these units would increase fixed overhead by $660 and selling and administrative costs by $360. If Benjamin accepts the offer, its profits will:

A. Decease by $8,556. B. Increase by $37,536. C. Increase by $6,340. D. Increase by $7,360. E. Increase by $8,556.

2. Markson Company had the following results of operations for the past year:

Sales (8,000 units at $19.10)		$152,800
Variable manufacturing costs	$82,400
Fixed manufacturing costs	14,100
Variable selling and administrative expenses	8,400
Fixed selling and administrative expenses	19,100	(124,000)
Operating income		$28,800

A foreign company whose sales will not affect Markson's market offers to buy 2,000 units at $12.65 per unit. In addition to variable manufacturing costs, selling these units would increase fixed overhead by $1,510 for the purchase of special tools. If Markson accepts this additional business, its profits will:

A. Decrease by $5,700. B. Decrease by $4,110. C. Decrease by $1,510. D. Increase by $1,090. E. Increase by $2,600.