Clear Sky Sailmakers manufactures sails for sailboats. The company has the capacity to produce 15,000 sails per year, but is currently producing and selling 10,000 sails per year. The following information relates to current production: Sale price per unit $250 Variable costs per unit: Manufacturing $165 Marketing and administrative $50 Total fixed costs: Manufacturing $750,000 Marketing and administrative $200,000

If a special sales order is accepted for 2,500 sails at a price of $205 per unit, fixed costs increase by $14,000, and variable marketing and administrative costs for that order are $25 per unit, how would operating income be affected? (NOTE: Assume regular sales are not affected by the special order.)

A. Increase by $23,500 B. Decrease by $23,500 C. Increase by $37,500 D. Increase by $86,000