Craylon Manufacturing produces a single product that sells for $130. Variable costs per unit equal $35.

The company expects total fixed costs to be $65,000 for the next month at the projected sales level of 1400 units. In an attempt to improve performance, management is considering a number of alternative actions. Each situation is to be evaluated separately. One alternative is to increase advertising expenses by $12,000. What is the effect on operating income with the increase of advertising expenses? 23) ______

A) Operating income will increase by $12,000.

B) Operating income will decrease by $12,000.

C) Operating income will increase by $56,000.

D) Operating income will decrease by $56,000.