TrainTrain (TT)company makes a product that regularly sells for KWD 12.500. The product has variable manufacturing costs of KWD8.500 per unit and fixed costs of KWD2.000 per unit (based on KWD200,000total fixed costs at current production of 100,000 units). Therefore, total production cost is KWD10.500. TT receives an offer from Umberto Tozzi Company (UTC) to purchase 10,000 units for KWD10 each. Selling and administrative costs and future sales will not be affected by the sale and TT does not expect any additional costs. The expected increase in revenues is:

Select one:

a. KWD42,500

b. KWD85,000

c. KWD105,000

d. KWD2