y High Seats manufactures seats for airplanes. The company has the capacity to produce100,000 seats peryear, but currently produces and sells75,000 seats per year. The following information relates to the current production of theproduct:

Sale price per unit

$410

Variable costs perunit:

Manufacturing

$220

Marketing and administrative

$80

Total fixedcosts:

Manufacturing

$750,000

Marketing and administrative

$220,000

If a special sales order is accepted for 7,200 seats at a price of $340 perunit, and fixed costs remainunchanged, how would operating income beaffected? (NOTE: Assume regular sales are not affected by the specialorder.)

B.

Increase by $2,448,000

C.

Decrease by $288,000

D.

Increase by