Division L at Reiner Ltd. manufactures 17387 units of part #70, which it currently sells to outside customers. Selected data for part #70 are given below: Unit selling price to outside customers $90.66 Variable production cost per unit 54.48 Variable selling and administrative expense per unit 11.02 Total fixed production cost (based on a capacity of 19337 units per year) $380000

Division K at Reiner Ltd. currently purchases 7760 units of part #70 from an outside supplier at a price of $83.82. Consideration is being given to buying internally rather than from the outside supplier. If an internal transfer takes place, it has been determined that variable S&A expense would be cut by one quarter for any sales made to Division K. Assume the two divisions agree on a transfer price of $80.61. What is the incremental income to division L if a transfer takes place?

Select one:

a. $89570

b. $-28926

c. $-7547

d. $24910