Duncan Co Sells Product P at a Price of $38 a a Unit

Multiple Choice

Duncan Co. sells product P at a price of $38 a unit. The per-unit cost data are: direct materials $8, direct labour $10, and overhead $12 (25% fixed and 75% variable) . Wolff has sufficient capacity to accept a special order for 40,000 units just received. Selling costs associated with this order would be $3 per unit.
At a selling price of $33 per unit, the operating income will:

A) Increase by $60,000
B) Increase by $80,000
C) Increase by $120,000
D) Increase by $160,000