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Pietarsaari Oy, a Finnish company, produces cross-country ski poles that it sells for 33 a pair. (The Finnish unit of currency, the euro, is denoted

Pietarsaari Oy, a Finnish company, produces cross-country ski poles that it sells for 33 a pair. (The Finnish unit of currency, the euro, is denoted by .) Operating at capacity, the company can produce 56,000 pairs of ski poles a year. Costs associated with this level of production and sales are given below: Per Pair Total Direct materials 11 616,000 Direct labor 4 224,000 Variable manufacturing overhead 1 56,000 Fixed manufacturing overhead 4 224,000 Variable selling expense 2 112,000 Fixed selling expense 5 280,000 Total cost 27 1,512,000 Required: 1. The Finnish army would like to make a one-time-only purchase of 9,100 pairs of ski poles for its mountain troops. The army would pay a fixed fee of 6 per pair, and in addition it would reimburse the Pietarsaari Oy company for its unit manufacturing costs (both fixed and variable). Due to a recession, the company would otherwise produce and sell only 46,900 pairs of ski poles this year. (Total fixed manufacturing overhead cost would be the same whether 46,900 pairs or 56,000 pairs of ski poles were produced.) The company would not incur its usual variable selling expenses with this special order. If the Pietarsaari Oy company accepts the armys offer, by how much would net operating income increase or decrease from what it would be if only 46,900 pairs of ski poles were produced and sold during the year? (Input the amount as a positive value. Omit the "" sign in your response.)

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