Data concerning Marchman Corporation's single product appear below:

	Per Unit				Percent of Sales
Selling price	$	140				100	%
Variable expenses		70				50	%
Contribution margin		70				50	%

The company is currently selling 4,900 units per month. Fixed expenses are $285,700 per month. Consider each of the following questions independently.

This question is to be considered independently of all other questions relating to Marchman Corporation. Refer to the original data when answering this question.

Management is considering using a new component that would increase the unit variable cost by $2. Since the new component would increase the features of the company's product, the marketing manager predicts that monthly sales would increase by 200 units. What should be the overall effect on the company's monthly net operating income of this change?

Decrease of $7,100

Decrease of $3,800

Increase of $14,000

Increase of $3,800