Birney Company has prepared the following budget data:
Sales
150,000 units
Selling price
$25 per unit
Variable expenses
$15 per unit
Fixed manufacturing expenses
$800,000
Fixed selling and admin. expenses
$700,000
An advertising agency claims that an aggressive advertising campaign would enable the company to increase its unit sales by 20%. What is the maximum amount that the company can pay for advertising and obtain a net operating income of $200,000?
A) $100,000
B) $200,000
C) $300,000
D) $550,000