MC Qu. 72 Benjamin Company had the following results...

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

Sales (14,200 units at $18)				$	255,600
Direct materials and direct labor	$	99,400
Overhead (20% variable)		28,400
Selling and administrative expenses (all fixed)		18,460			(146,260	)
Operating income				$	109,340

A foreign company (whose sales will not affect Benjamins market) offers to buy 3,550 units at $13.60 per unit. In addition to variable manufacturing costs, selling these units would increase fixed overhead by $880 and selling and administrative costs by $900. Assuming Benjamins productive capacity is 14,200 units per year and accepts the offer, its profits will:

Multiple Choice

• Decrease by $15,620.

• Decrease by $17,400.

• Decrease by $ 93,720.

• Increase by $ 13,840.

• Increase by $ 4,450.