Company ABC presents the following information:

Variable costs per unit $ 24

Fixed Costs $ 90,000

The sale price per unit is $ 34 and normally 10,000 units are sold.

The marketing manager is proposing an increase in the ad budget of $ 13,600 under the assumption that it will produce an increase in sales of 1,000 additional units. The rest of the cost information remains unchanged. What will be the effect of the increase in the ad budget on the company's profits?

a. Increase by $ 6,400.

b. It is reduced by $ 6,400.

c. It is reduced by $ 3,600.

d. Increase by $ 3,600.