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17- A company produces 1,000 packages of chicken feed per month. The sales price is $7.00 per pack. Variable cost is $1.00 per unit, and
17-
A company produces 1,000 packages of chicken feed per month. The sales price is $7.00 per pack. Variable cost is $1.00 per unit, and fixed costs are $1,700 per month. Management is considering adding a vitamin supplement to improve the value of the product. The variable cost will increase from $1.00 to $2.00 per unit, but there will be no change in fixed costs. The company will price the new product at $4.30 to compete with other products. How will this affect operating income? A. Operating income will decrease by $3,700 per month. B. Operating income will remain unchanged. C. Operating income will increase by $3,700 per month. D. Operating income will decrease by $1,700 per monthStep by Step Solution
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