Wade Company is operating at 75% of its manufacturing capacity of 140,000 product units per year. A customer has offered to buy an additional 14,000 units at $36 each and sell them outside the country so as not to compete with Wade. The following data are available:

Costs at 75% capacity:	Per unit	Total
Direct materials	$14.40	$1,512,000
Direct labor	10.80	1,134,000
Overhead (fixed and variable)	18.00	1,890,000
Totals	$43.20	$4,536,000

In producing 14,000 additional units, fixed overhead costs would remain at their current level but incremental variable overhead costs of $7.2 per unit would be incurred. What is the effect on income if Wade accepts this order?

Income will increase by $10.80 per unit.

Income will increase by $3.60 per unit.

Income will decrease by $32.40 per unit.

Income will decrease by $7.20 per unit.

Income will increase by $7.20 per unit.