Markson Company had the following results of operations for the past year:

Sales (8,000 units at $21.00)$168,000

Variable manufacturing costs$90,000

Fixed manufacturing costs16,000

Variable selling and administrative expenses16,000

Fixed selling and administrative expenses21,000(143,000)

Operating income$25,000

A foreign company whose sales will not affect Markson's market offers to buy 2,000 units at $15.50 per unit. In addition to variable manufacturing costs, selling these units would increase fixed overhead by $1,700 for the purchase of special tools. Markson's annual productive capacity is 12,000 units. If Markson accepts this additional business, its profits will:

Multiple Choice

• Increase by $2,800.
• Decrease by $1,700.
• Decrease by $6,200.
• Increase by $4,500.
• Decrease by $4,750.