Tocchet Company manufactures CB1, a citizens band radio. The company's plant has an annual capacity of 50,000 units. Tocchet currently sells 40,000 units at a price of $105. It has the following cost structure:

Variable manufacturing cost per unit ............................. $45

Fixed manufacturing costs ...........................................$800,000

Variable marketing and distribution cost per unit ............... $10

Fixed marketing and distribution costs ..........................$600,000

Required

The Marketing Department indicates that decreasing the selling price to $99 would increase sales to 50,000 units. This strategy will require Tocchet to increase its fixed marketing and distribution costs. Calculate the maximum increase in fixed marketing and distribution costs that will allow Tocchet to reduce the selling price to $99 and maintain its operating income.