Minnesota Inc Assuming There Is Excess Capacity, the Effect of Accepting a

Multiple Choice

Minnesota Inc.provided the following information regarding its only product--scissors: $\begin{array}{lr}\text { Fixed manufacturing costs } & \$ 425,000 \\\text { Fixed selling and administrative costs } & 85,000 \\\text { Fixed manufacturing costs } & 72,000 \\\text { Fixed selling and administrative costs } & 80,000 \\\text { Variable manufacturing costs } & 1,030,000 \\\text { Variable selling and administrative costs } & 120,000 \\\text { Selling unit price } & 125 \\& \\\text { Units produced and sold } & 23,000\end{array}$ Assuming there is excess capacity, the effect of accepting a special order for 1,000 units at a price of $80.00 per scissors will be _____.

A) net income would increase by $1,000
B) net income would increase by $22,500
C) net income would decrease by $80,000
D) net income would decrease by $200,000