Data for Herron Corporation are shown below:

	Per Unit			Percent of Sales
Selling price	$	50		100%
Variable expenses		40		80%
Contribution margin	$	10		20%

Fixed expenses are $75,300 per month and the company is selling 4,000 units per month.

Required:
1a.	The marketing manager believes that an $8,900 increase in the monthly advertising budget would increase monthly sales by $13,500. Calculate the increase or decrease in net operating income. (Input the amount as a positive value. Omit the "$" sign in your response.)

Net operating income

(Click to select) increases decreases by

$

1b.

Should the advertising budget be increased ?

	No
	Yes