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String Corporation can manufacture 490,000 tennis rackets a year at a variable cost of $15 per racket and at the fixed costs of $500,000. String

String Corporation can manufacture 490,000 tennis rackets a year at a variable cost of $15 per racket and at the fixed costs of $500,000. String budgeted that it can sell 400,000 at $25 each. An additional order of 100,000 was received, but at a discount of 35% from the regular price.

If String accepts the special order, income before taxes will:

A)

Decrease by $100,000

C)

Increase by $25,000

B)

Increase by $125,000

D)

not change at all

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