Do the Hustle Company, a manufacturer of bell bottom jeans, has the capacity to produce 15,000 pairs of jeans each month. Current production and sales are 10,000 pairs per month at a selling price of $15 each. Based on this level of activity, the following unit costs are incurred:

Direct Materials	$5.00
Direct Labor	$3.00
Variable MOH	$0.75
Fixed MOH	$1.50

Hustle has received a special order from a customer who wants to pay a reduced price of $10 per pair of jeans for an order of 6,000 pairs of jeans. If the special order is accepted, what will be the change in operating income?

A.

increase of $5,000

B.

increase of $1,250

C.

decrease of $6,250

D.

decrease of $30,000

E.

increase of $7,500