A company produces

1 comma 0001,000

packages of cat food per month. The sales price is

$ 4.00$4.00

per pack. Variable cost is

$ 1.60$1.60

per unit, and fixed costs are

$ 1 comma 700$1,700

per month. Management is considering adding a vitamin supplement to improve the value of the product. The variable cost will increase from

$ 1.60$1.60

to

$ 1.80$1.80

per unit, and fixed costs will increase by

1010%.

The company will price the new product at

$ 5.00$5.00

per pack. How will this affect operating income?

A.

Operating income will remain unchanged.

B.Operating income will decrease by

$ 630$630

per month.

C.Operating income will increase by

$ 630$630

per month.

D.Operating income will decrease by

$ 970$970

per month.