Company C currently sells 100 units per month at a selling price of $70 per unit. The contribution margin on these units is $53. Fixed expenses total $1,000 per month. If Company C uses a higher quality component that would increase variable costs by $1 per unit, Company C thinks that they can sell and additional 10 units per month. Fixed costs would not be affected. Should Company C use the higher quality part? Why or why not?

• A. Yes because overall net income will decrease by $580.
• B. Yes because overall net income will increase by $420.
• C. Yes because overall net income will increase by $320.
• D. No because overall net income will decrease by $100.