Assume the following information:

	Amount				Per Unit
Sales	$	300,000				$	40
Variable expenses		120,000					16
Contribution margin		180,000				$	24
Fixed expenses		77,000
Net operating income	$	103,000

If the variable expenses increase by $1 per unit, the advertising expenditures increase by $15,000, and unit sales increase by 5%, then the best of estimate of the new net operating income is:

Multiple Choice

• $94,325.

• $103,375.

• $87,200.

• $89,125