Bluebird Mfg. has received a special one-time order for 15,000 bird feeders at $2.75 per unit. Bluebird currently produces and sells 75,000 units at $7.00 each. This level represents 80% of its capacity. Production costs for these units are $3.50 per unit, which includes $2.25 variable cost and $1.25 fixed cost. If Bluebird accepts this additional business, the effect on net income will be:

Multiple Choice

• $41,250 increase.

• $11,250 increase.

• $11,250 decrease.

• $7,500 increase.