Foundational 5-7

Oslo Company prepared the following contribution format income statement based on a sales volume of 1,000 units (the relevant range of production is 500 units to 1,500 units):

Sales	$	23,000
Variable expenses		13,000
Contribution margin		10,000
Fixed expenses		8,500
Net operating income	$	1,500

Required:

If the variable cost per unit increases by $.50, spending on advertising increases by $1,000, and unit sales increase by 250 units, what would be the net operating income? (Do not round intermediate calculations.)