Sheridan Company incurs the following costs to produce 11700 units of a subcomponent:

Direct materials	$9828
Direct labor	13221
Variable overhead	14742
Fixed overhead	16200

An outside supplier has offered to sell Sheridan the subcomponent for $2.85 a unit. If Sheridan accepts the offer, it could use the production capacity to produce another product that would generate additional income of $3600. The increase (decrease) in net income from accepting the offer would be

$846.

$(3600).

$(846).

$8046.