Bluebird Manufacturing has received a special one-time order for 16,500 bird feeders at $4.50 per unit. Bluebird currently produces and sells 75,000 units at $8.50 each. This level represents 80% of its capacity. Production costs for these units are $5.00 per unit, which includes $3.75 of variable costs and $2.75 of fixed costs. If the special offer is accepted, there will be no incremental fixed cost. If Bluebird accepts this additional business, the effect on income will be:

Multiple Choice

$74,250 increase.

$12,375 increase.

$61,875 increase.

$8,250 decrease.

$61,875 decrease.