Preston Inc. manufactures G and T from a joint process (cost = $81,000). Five thousand pounds of G can be sold at split-off for $20 per pound or processed further at an additional cost of $23,000 and then sold for $25 per pound. If Preston decides to process G beyond the split-off point, operating income will:

Multiple Choice

• increase by $7,000.

• increase by $19,000.

• increase by $2,000.

• decrease by $7,000.

• decrease by $19,000.