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5. Istanbul company makes special kind of product. Variable costs are $221 per unit, and fixed costs are $30,000 per month. Istanbul sells 500 units
5. Istanbul company makes special kind of product. Variable costs are $221 per unit, and fixed costs are $30,000 per month. Istanbul sells 500 units per month at a sales price of $310. If the quality of the product is upgraded, the company believes it can increase the sales price to $349. If so, the variable cost will increase to $230 per unit. And the fixed costs will rise by 50%. If Istanbul decides to upgrade, how will operating income be affected? A. Increase by $3,000 B. Will remain the same C. Increase by $4,500 D. Decrease by $4,500 E. Decrease by $15,000
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