Taizhong Semiconductor Company Mass Produces Several Common Computer Chips

Taizhong Semiconductor Company mass produces several common computer chips. Type A sells for $1.20 per unit. Variable cost is $0.95 per unit and the fixed costs are $32,000 per month. Taizhong currently sells 140,000 units per month. Under intense pressure to boost profits, the production manager has a plan which will reduce fixed costs by 10%. How will this affect net operating income?

A) It will go up exactly 10%.
B) It will go down approximately 40%.
C) It will go up approximately 12%.
D) It will go up approximately 107%.