Ramsey Corporation produces and sells a single product. Data concerning that product appear below: Per Unit Percent of Sales Selling Price $120 100% Variable Expenses 72 60% Contribution Margin $ 48 40% The company is currently selling 4,000 units per month. Fixed expenses total $166,000 per month. Management is considering using a new component that would increase the unit variable cost by $2. Since the new component would increase the features of the companys product, the marketing manager predicts that monthly sales would increase by 200 units. What would be the overall effect on Ramseys monthly net operating income?

a. Increase of $1,200.

b. Decrease of $9,200.

c. Increase of $9,200.

d. Decrease of $1,200.