Lowwater Sailmakers Manufactures Sails for Sailboats

Lowwater Sailmakers manufactures sails for sailboats. The company has the capacity to produce 25,000 sails per year, and is currently producing and selling 20,000 sails per year. The following information relates to current production:

- If a special sales order is accepted for 2,000 sails at a price of $95 per unit, and fixed costs increase by $10,000, what is the change in operating income affected?

A) Operating income decreases $34,000.
B) Operating income decreases $44,000.
C) Operating income increases $20,000.
D) Operating income increases $25,000.