Radio Inc. manufactures and sells its product i-Radio. Its contribution margin/unit is $100. Currently, the company produces and sells 2,000 units. What is the impact on the net income if the company increases the direct material cost per unit by $20, and increases sales to 3,000 units.

Options:

-The net income will increase by $100,000?

-The net income will decrease by $60,000?

-The net income will increase by $40,000?

-The net income will decrease by $20,000?

One of the 4 options.

Thanks