Due to erratic sales of its sole product - a high -capacity battery for laptop; computers PEM, Inc., has been experiencing difficulty for some time. The company’s contribution format income statement for the most recent month is given below

Sales (19,500 units x $30 per unit) ..$585,000

Variable expenses ........$409,500

Contribution margin ........$175,500

Fixed expenses .........$180,000

Net operating loss ............... $(4,500)

Requirement

The president believes that a $16,000 increase in the monthly advertising budget, combined with an intensified effort by the sales staff, will result in an $80,000 increase in monthly sales. If the president is right, by how much will the company's net operating income increase or decrease? (Use the incremental approach in preparing your answer.)