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 4,000 units per month.

Required:

Management is considering using a new component that would increase the unit variable cost by $7. 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?