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Istanbul Company makes a special kind of product. Variable costs are $221 per unit, and fixed costs are $30,000 per month. Istanbul sells 500 units
Istanbul Company makes a 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) decrease by $4,500 B) increase by $4,500 C) decrease by $15,000 D) increase by $3,000 E) will remain the same
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