The sales manager is convinced that a $60,000 expenditure on advertising will increase unit sales by…

Drake Company”s income statement for the most recent year appears below:

Sales (26,000 units)

$650,000

Less: Variable expenses

442,000

Contribution margin

208,000

Less: Fixed expenses

234,000

Net operating loss

$ (26,000)

The sales manager is convinced that a $60,000 expenditure on advertising will increase unit sales by fifty percent without any other increase in fixed expenses. If the sales manager is correct, the company”s net operating income would increase by:

A) $44,000

B) $34,000

C) $30,000

D) $49,000