Elkhorn, Inc., which has excess capacity, received a special order for 5,200 units at a price of $13 per unit. Currently, production and sales are anticipated to be 11,000 units without considering the special order. Budget information for the current year follows.

Sales	$	198,000
Less: Cost of goods sold		132,000
Gross margin	$	66,000

Cost of goods sold includes $22,000 of fixed manufacturing cost. If the special order is accepted, the company's income will:

Multiple Choice

• increase by $5,200.

• decrease by $5,200.

• increase by $15,600.

• decrease by $15,600.

• None of the answers is correct.