Northern Illinois Manufacturing markets a simple water control and timer that it mass-produces. During the past year, the company sold 701,000 units at an average selling price of 4.25 per unit. The variable expenses were $2,039,910 and the fixed expenses were $693,340.

1. If sales increase by 60,000 units and the cost behaviors do not change, how much will net operating income increase on this product?
2. Northern Illinois management believes that increased advertising would increase unit sales by 10%. If management wants to increase its operating income by $50,000, how much could the company spend on additional advertising to reach its goal?
3. Using last years data as the starting point, assume the company can increase sales by 5% by just continuing its current marketing program. What would the companys net operating income be next year using the DOL?