Wisconsin Company Has a Current Production Capacity Level of 200,000

Multiple Choice

Wisconsin Company has a current production capacity level of 200,000 units per month.At this level of production,variable costs are $1.00 per unit and fixed costs are $0.50 per unit.Current monthly sales are 164,500 units.Gates Company has contacted Wisconsin Company about purchasing 20,000 units at $2.00 each.Current sales would not be affected by the special order and no additional fixed costs would be incurred on the special order.Variable costs would increase $0.10 per unit with the special order.If the order is accepted,what is Wisconsin Company's increase in operating income?

A) $8,000
B) $18,000
C) $20,000
D) $24,000