Salish Industries manufactures a product with the following costs per unit at the expected production of 60,000 units:

Direct materials $ 8

Direct labor 15

Variable manufacturing overhead 10

Fixed manufacturing overhead 12

The company has the capacity to produce 70,000 units. The product regularly sells for $60. A wholesaler has offered to pay $55 each for 5,000 units.

If the special order is accepted, the effect on operating income would be a

a. $42,000 decrease

b. $67,000 increase

c. $110,000 increase

d. $182,000 decrease