Ovation Company has a single product called a Bit. The company normally produces and sells $64,800$ Bits each year at a selling price of $$47$ per unit. The company$$s unit costs at this level of activity are given below:

Direct materials $ $10\mathrm{.}50$

Direct labour $7\mathrm{.}50$

Variable manufacturing overhead $3\mathrm{.}60$

Fixed manufacturing overhead $4\mathrm{.}80($$$311,040$ total$)$

Variable selling expenses $6\mathrm{.}60$

Fixed selling expenses $2\mathrm{.}70($$$174,960$ total$)$

Total cost per unit $ $35\mathrm{.}70$

A number of questions relating to the production and sale of Bits follow. Each question is independent.

Required:

$1.$ Assume that Ovation Company has sufficient capacity to produce $97,200$ Bits each year without any increase in fixed manufacturing overhead costs. The company could increase its sales by $25\%$ above the current $64,800$ units each year if it were willing to increase the fixed selling expenses by $$105,000.$

a$.$ Calculate the incremental net operating income.