Final answer:
The overall effect on the company's monthly net operating income of using the new component would be an increase of $7,000.
Step-by-step explanation:
To determine the overall effect on the company's monthly net operating income, we need to consider the changes in both fixed and variable costs, as well as the increase in sales.
In this case, the fixed expenses remain unchanged at $521,000 per month.
The unit variable cost increases by $6, which means the new unit variable cost would be the original variable cost plus the increase, resulting in $15 + $6 = $21.
The increase in sales by 500 units means the company is now selling 7,000 + 500 = 7,500 units per month.
To calculate the new net operating income, we first calculate the increase in variable costs by multiplying the increase in units sold by the amount of the increase in unit variable costs: 500 units * $6 = $3,000.
Next, we calculate the increase in revenue by multiplying the increase in units sold by the selling price per unit: 500 units * $20 = $10,000.
Finally, we calculate the overall effect on net operating income by subtracting the increase in fixed costs from the increase in revenue: $10,000 - $3,000 = $7,000.
Therefore, the overall effect on the company's monthly net operating income of this change is an increase of $7,000.