Cobb Company incurs costs of $28 per unit ($18 variable and $10 fixed) to make a product that normally sells for $42. A foreign wholesaler offers to buy 5,000 units at $25 each. Cobb will incur additional shipping costs of $12 per unit. Compute the increase or decrease in net income Cobb will realize by accepting the special order, assuming Cobb has excess operating capacity. Should Cobb Company accept the special order?

		If accepted, the special order will increase Cobb Companys net income by $25,000. Thus managers should accept the special order.
		If accepted, the special order will decrease Cobb Companys net income by $25,000. Thus managers should reject the special order.
		If accepted, the special order will increase Cobb Companys net income by $25,000. Thus managers should reject the special order.
		All the above statements are incorrect.