Visionary Game Company sells 600,000 units per year of a particular video game cartridge at $12 each. The current unit cost of the game is broken down as follows:

 

 

 

Direct materials  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          $3.00

 

Direct labor................................................................................................................................. 1.00

 

Variable factory overhead.......................................................................................................... 3.50

 

Fixed factory overhead . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         1.50

 

Total  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           $9.00

 

At the beginning of the current year, Visionary received a special order for 10,000 of these game cartridges per month, for one year only, at a sales price of $8 per unit. To fill the order, Visionary will have to rent additional assembly space at a cost of $12,000 ($1,000 per month).

Compute the estimated increase or decrease in annual operating income that will result from accepting this special order