Sea Line is a massive cargo ship company that contracts with larger, well$-$known shippers to provide container shipping by sea to any deep water port in the world. Sea Line owns $50$ ships, and currently has

contracts for $41$ of those ships. The other shippers pay Sea Line $$2,750,000$ per year to provide shipping services for their customers' containers. Sea Line is considering a new contract where they would provide $5$

ships to a new company for $$2,475,000$ per year. Each Sea Line ship incurs yearly costs of $$1,210,000$ for labor, $$330,000$ for fuel, $$1,100,000$ in fixed overhead, and $$550,000$ in variable overhead.

What would be the differential gain or loss on this new contract?

Select one:

a$.$ A differential gain of $$1,925,000$

b$.$ A differential loss of $$1,375,000$

c$.$ Cannot be determined from the information provided.

d$.$ A differential loss of $$3,575,000$

e$.$ A differential gain of $$4,675,000$