Melville Company Makes Special Equipment Used in Cell Towers A Foreign Company Has Offered to Buy 75 Units for Sells

Melville Company makes special equipment used in cell towers.Each unit sells for $420.Melville produces and sells 12,700 units per year.They have provided the following income statement data: $\begin{array}{c}\begin{array}{|l|r|}\hline \text { Traditional Format }\\\hline \text { Revenue } & \$ 5,334,000 \\\hline \text { Cost of goods sold } &2,800,000 \\\hline \text { Gross profit } & 2,534,000 \\\hline \text { Selling \& admin, expenses } & \underline{750,000} \\\hline & \\\hline & \\\hline &\\\hline &\\\hline \text { Operating income } & \$ 1,784,000 \\\hline\end{array}\begin{array}{l|r|}\hline \text { Contribution Margin Format}\\\hline \text { Revenue } & \$ 5,334,000 \\\hline \text { Variable costs: } &\\\hline \text { Manufacturing } & 800,000 \\\hline \text { Selling \& admin, } & \underline{500,000} \\\hline \text { Contribution margin } &4,034,000 \\\hline \text { Fixed costs: } \\\hline \text { Manufacturing }&2,000,000 \\\hline \text { Selling \& admin. } & 250,000\\\hline\text { Operating income }& \$ 1,784,000\\\hline \end{array}\end{array}$

A foreign company has offered to buy 75 units for a reduced sales price of $320 per unit.The marketing manager says the sale will not affect the company's regular sales.The sales manager says that this sale will require incremental selling and administrative costs,as it is a one-time deal.The production manager reports that it would require an additional $30,000 of fixed manufacturing costs to accommodate the specifications of the buyer.If Melville accepts the deal,how will this impact operating income? (Round any intermediate calculations to the nearest cent,and your final answer to the nearest dollar.)

A) Operating income will increase by $13,677.
B) Operating income will decrease by $13,677.
C) Operating income will increase by $24,000.
D) Operating income will decrease by $16,323.