Benjamin Company Had the Following Results of Operations for the Past

Multiple Choice

Benjamin Company had the following results of operations for the past year: $\begin{array}{llr} \text { Sales }(16,000 \text { units at } \$ 10) &&\$160,000\\ \text { Direct materials and direct labor } &\$96,000\\ \text { Overhead ( \( 20 \% \) variable) } &16,000\\ \text { Selling and administrative expenses (all fixed) } &32,000&(144,000) \\ \text {Operating income } &&\$16,000\\\end{array}$
A foreign company (whose sales will not affect Benjamin's market) offers to buy 4,000 units at $7.50 per unit. In addition to variable manufacturing costs, selling these units would increase fixed overhead by $600 and selling and administrative costs by $300.
- Assuming Benjamin's productive capacity is 16,000 units per year and accepts the offer, its profits will:

A) Decrease by $10,000.
B) Decrease by $ 6,000.
C) Decrease by $10,900.
D) Increase by $ 9,100.
E) Increase by $ 4,300.