if anyone could help me out , im confused on this question

2. Gyro Gear Company produces a special gear used in automatic transmissions. Each gear sells for $28, and the company sells approximately 500,000 gears each year. Unit cost data for the year are presented below: Direct materials Direct labor Other Costs: Manufacturing Distribution $6 5 Variable Fixed $2 $7 4 3 Gyro has received an offer from an international manufacturer to purchase 25,000 gears. They have offered a price of $20 per gear. Domestic sales would be unaffected by this transaction. If the offer is accepted, variable distribution costs will decrease $1.50 per gear for insurance, shipping and import duties. What is the incremental profit or loss associated with accepting their offer? a. $175,000 incremental loss b. $370,500 incremental profit c. $112,500 incremental profit d. $462,500 incremental profit e. $350,000 incremental profit