Feather Friends, Inc., distributes a high-quality wooden birdhouse that sells for $40 per unit. Variable expenses are $20.00 per unit, and fixed expenses total $180,000 per year. Its operating results for last year were as follows:

Sales$1,040,000

Variable expenses520,000

Contribution margin520,000

Fixed expenses180,000

Net operating income$340,000

1a) The sales manager is convinced that a 13% reduction in the selling price, combined with a $74,000 increase in advertising, would increase this year's unit sales by 25%. If the sales manager's ideas are implemented, how much will net operating income increase or decrease over last year?(Negative amounts should be input with a minus sign.)

1b)The president does not want to change the selling price. Instead, he wants to increase the sales commission by $2.50 per unit. He thinks that this move, combined with some increase in advertising, would increase this year's sales by 25%. How much could the president increase this year's advertising expense and still earn the same $340,000 net operating income as last year?