Sandhill Forge manufactures saddles for show horses. The company has received a special order for 340 saddles for an international competition. Each of these saddles would include the specialized logo of the competition. Last year Sandhill produced 760 saddles, and the company has the capacity to produce 1100 saddles per year. Sandhills saddles normally sell for $700 each, but the special offer is for $227800 ($670 per saddle). The controller has provided information to management that estimates the variable cost per saddle is $460; fixed manufacturing overhead is $85/saddle. Of the fixed costs assigned to this special order, $16450 is for the specialized logos, the remainder is attributable to costs that will be incurred regardless of whether the special order is produced. What is the operating income generated by the special order?

$71400

$26050

$42500

$54950