Elkhorn, Inc., which has excess capacity, received a special order for 4,000 units at a price of $15 per unit. Currently, production and sales are anticipated to be 10,000 units without considering the special order. Budget information for the current year follows.

Sales	$	190,000
Less: Cost of Goods Sold		145,000
Gross Margin	$	45,000

Cost of goods sold includes $30,000 of fixed manufacturing cost. If the special order is accepted, the company's income will:

Multiple Choice

• increase by $2,000.

• decrease by $2,000.

• increase by $14,000.

• decrease by $14,000.

• None of the answers is correct.