Polynesia Company manufactures sonars for fishing boats

Its Model 70 sells for $300. Polynesia produces and sells 5,700 of them per year. Cost data follow:

Variable manufacturing $100 per unit
Variable selling and administrative $17 per unit
Fixed manufacturing $290,000 per year
Fixed selling and administrative $150,000 per year

Arthur Bailey, the sales manager, wants to offer a special sale to a new customer that outfits boats. He proposes a sale of 41 units at a special price of $148 per unit. Arthur believes that it will not affect the company's regular sales in the long run because it is a one-time transaction. The sale will require the normal variable costs, both selling and administrative costs and manufacturing costs, but will not impact the fixed costs. The president of the company has some reservations but finally agrees to make the deal if and only if it adds a minimum of $1,500 to operating income. Based on the president's criteria, Polynesia will not make the offer.
Indicate whether the statement is true or false

TRUE .Expected increase in revenue (41 x 148 ) $6,068
Less: Expected increase in costs
Variable manufacturing (100 x 41 ) $4,100
Variable selling and administrative (17 x 41 ) 697 4,797
Expected increase in operating income 1,271
Minimum acceptable increase in operating income $1,500