Centric Sail Makers manufactures sails for sailboats. The company has the capacity to produce 38,000 sails per year and is currently producing and selling 30,000 sails per year. The following information relates to current production: Sales price per unit $200 Variable costs per unit: Manufacturing $60 Selling and administrative $20 Total fixed costs: Manufacturing $875,000 Selling and administrative $600,000 If a special pricing order is accepted for 3,500 sails at a sales price of $180 per unit, and fixed costs remain unchanged, what is the change in operating income? (Assume the special pricing order will require variable manufacturing costs and variable selling and administrative costs.) Select one: O A. Operating income decreases by $880,000. 0 B. Operating income increases by $440,000 0 C. Operating income increases by $880,000. D. Operating income decreases by $440,000. E. Operating income increases by $660,000. F. Operating income increases by $350,000. O G. None of the above. Smithsonian Manufacturing sells a special type of navigation equipment for $1,400. Variable costs are $800 per unit. When a special order arrived from a foreign contractor to buy 44 units at a reduced sales price of $1,000 per unit, there was a discussion among the managers. The controller said that as long as the special price was greater than the variable costs, the sale would contribute to the company's profits and should be accepted as offered. The vice president, however, decided to decline the order. Which of the following statements supports the decision of the vice president? Select one: A. The company will need to hire additional staff to execute this order. 0 B. The variable costs of $800 includes variable costs of packing the product. C. The order is not likely to affect the regular sales. D. The company is operating at 70% of its production capacity. E. None of the above