o 1920 D 500 M - OM The Melrose Corporation produces a single product, Product C. Melrose has the capacity to produce 86.000 units of Product Ceach year. If Melrose produces at capacity, the per unit costs to produce and sell one unit of Product Care as follows: Direct materials Duect labor Vartable manufacturing overhead Fixed manufacturing overhead Variable selling expense Fixed selling expense $25.60 $ 20.20 $ 15,40 $ 18.00 $ 13.60 $ 8.80 The regular selling price of one unit of Product C is $113.60. A special order has been received by Melrose from Moore Corporation to purchase 6.000 units of Product C during the upcoming year. If this special order is accepted, the variable selling expense will be reduced by 75% Total fixed manufacturing overhead and fixed selling expenses would be unaffected except that Melrose will need to purchase a specialized machine to engrave the Moore name on each unit of product in the special order. The machine will cost $7,500 and will have no use efter the special order is filled. Assume that direct labor is a variable cost Assume Melrose expects to sell 76.000 units of Product C to regular customers next year. If Moore company offers to buy the 6,000 special units at $103.60 per unit, the effect of accepting the special order on Melrose's net operating income for next year will be: $73.200 Increase $13,200 increase $25,200 decrease O $226,500 increase