Wilson Company prepared the following preliminary budget assuming no advertising expenditures:

Selling price	$10 per unit
Unit sales	100,000
Variable expenses	$500,000
Fixed expenses	$200,000

Based on a market study, the company estimated that it could reduce the unit selling price by 10% and increase the unit sales volume by 35%, if $100,000 were spent on advertising. Assuming that these changes are incorporated in its budget, what should be the budgeted operating income?

Multiple Choice

• $172,500.

• $260,000.

• $240,000.

• $155,000.