Naumann Corporation produces and sells a single product. Data concerning that product appear below:

Per Unit

Percent of Sales

Selling price

$ $100$

$100\%$

Variable expenses

$30$

$30\%$

Contribution margin

$ $70$

$70\%$

Fixed expenses are $$234,000$ per month. The company is currently selling $5,000$ units per month.

Required:

Management is considering using a new component that would increase the unit variable cost by $$3.$ Since the new component would improve the company's product, the marketing manager predicts that monthly sales would increase by $500$ units. What should be the overall effect on the company's monthly net operating income of this change if fixed expenses are unaffected?