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Elkhorn, Inc., which has excess capacity, received a special order for 4,100 units at a price of $16 per unit. Currently, production and sales are

Elkhorn, Inc., which has excess capacity, received a special order for 4,100 units at a price of $16 per unit. Currently, production and sales are anticipated to be 14,000 units without considering the special order. Budget information for the current year follows.

Sales $ 252,000
Less: Cost of Goods Sold 196,000
Gross Margin $ 56,000

Cost of goods sold includes $28,000 of fixed manufacturing cost. If the special order is accepted, the company's income will:

Multiple Choice

A. increase by $8,200.

B. decrease by $8,200.

C. increase by $16,400.

D. decrease by $16,400.

E. None of the answers is correct.

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