Bluebird Manufacturing has received a special one-time order for 17,000 bird feeders at $5.00 per unit. Bluebird currently produces and sells 75,000 units at $9.00 each. This level represents 80% of its capacity. Production costs for these units are $5.50 per unit, which includes $4.25 of variable costs and $3.25 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

$85,000 increase.

$8,500 decrease.

$72,250 decrease.

$12,750 increase.

$72,250 increase.