Can you help me understand this question?
Hildes Dairy is considering adding a new line to their already profitable business. Market research indicates that sales revenue for the new line would be $30,000 for 25,000 units. Variable costs for the new product would be $0.85 per unit. Additional direct (avoidable) fixed costs would total $5000 and indirect fixed costs allocated from unavoidable costs currently in place would total $6250. If Hildes added the new line, its net income would
a) increase by 3750
b) increase by 8750
c) decrease by 2500
d) decrease by 3250
e) none of the above
This solution shows step-by-step calculations to determine the changes in net income of Hildes Dairy after adding a new line to their business.